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Does local culture trigger speculative investment behavior?

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  • Lee, Suin
  • Pantzalis, Christos
  • Park, Jung Chul

Abstract

The average investor who lives in a state with relatively higher alcohol consumption is more likely to buy and sell lottery-type stocks and to trade more often. Both of these activities entail sensation seeking; correspondingly, we find that speculative investment behavior is correlated with alcohol consumption only in states with lotteries and where a local tendency for sensation seeking behavior has not been diluted by an influx of migrants from other states where alcohol consumption is low. Most importantly, our results suggest that alcohol consumption does not per se drive a preference for investment gambles, but rather portrays the type of local culture in which the speculative investing occurs.

Suggested Citation

  • Lee, Suin & Pantzalis, Christos & Park, Jung Chul, 2019. "Does local culture trigger speculative investment behavior?," Journal of Business Research, Elsevier, vol. 103(C), pages 71-88.
    • Handle: RePEc:eee:jbrese:v:103:y:2019:i:c:p:71-88
    DOI: 10.1016/j.jbusres.2019.06.011
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    7. Gong, Pu & Wen, Zhuzhu & Xiong, Xiong & Gong, Cynthia M., 2021. "When do investors gamble in the stock market?," International Review of Financial Analysis, Elsevier, vol. 74(C).

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    More about this item

    Keywords

    Local culture; Alcohol consumption; Gambling; Lottery-type stocks; Turnover;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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