Household Participation in Stock Market Varies Widely by State

The investment decision matters for the welfare of households. Good financial decision-making could help households hedge against their income risks and achieve a better life. Although it is not necessarily the case that stock market participants are more financially sophisticated than nonparticipants, understanding the participation decisions made by households is important to both academic researchers and policymakers. An example is the shortage of retirement savings in the United States. If households cannot make the right investment decisions and, thereby, jeopardize their return on savings, then households are not only likely to save less but could fail to accumulate enough assets for retirement.