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Demographic Factors Affecting U.S. Households¡¯ Investment in Stocks

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  • Binod Guragai
  • S. Drew Peabody

Abstract

Using survey data of U.S. households, we examine the demographic factors associated with stock market participation to seek to explain why some households invest in stocks while others do not. We primarily utilize Probit model estimation robust to heteroskedasticity to evaluate multiple demographic variables that could potentially explain direct stock ownership. Additional tests examine the demographic factors associated with the amounts of direct stock ownership and indirect stock ownership through mutual funds, retirement accounts or other avenues. Our results identify various demographic factors that most likely affect U.S. households¡¯ investment in stocks, including age, gender, education level, income, homeownership and business ownership. These results are robust to multiple model variations. These findings may be of interest to financial scholars and policymakers as they seek to better understand stock market participation.

Suggested Citation

  • Binod Guragai & S. Drew Peabody, 2018. "Demographic Factors Affecting U.S. Households¡¯ Investment in Stocks," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(4), pages 112-122, April.
    • Handle: RePEc:ibn:ijefaa:v:10:y:2018:i:4:p:112-122
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    References listed on IDEAS

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    More about this item

    Keywords

    U.S. stock ownership; survey of consumer finances; demographic factors; household investment decisions;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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