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Subjective Quality of Life and Stock Market Participation of the Elderly: A Structural Equation Modelling Approach

Author

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  • Miha Dominko

    (Institute for Economic Research)

  • Miroslav Verbič

    (University of Ljubljana
    Institute for Economic Research)

Abstract

Using data from the Survey of Health, Aging and Retirement in Europe (SHARE), we studied the relationship between four quality of life domains (Control, Autonomy, Pleasure, and Self-realization) and stock market participation of the elderly in 13 European countries. We first assessed the psychometric properties of the CASP-12 scale used in SHARE and then proposed a structural equation model wherein quality of life affects stock market participation indirectly through its effect on trust and risk behavior. We found that risk preference had a greater effect on stock market participation than trust. Furthermore, our results indicated a consistent positive effect of the Self-realization domain and a negative effect of the Pleasure domain on stock market participation. Finally, the empirical results showed that the joint Control and Autonomy domain can have both a positive and a negative effect on stock market participation, depending on the country.

Suggested Citation

  • Miha Dominko & Miroslav Verbič, 2020. "Subjective Quality of Life and Stock Market Participation of the Elderly: A Structural Equation Modelling Approach," Journal of Family and Economic Issues, Springer, vol. 41(3), pages 505-519, September.
    • Handle: RePEc:kap:jfamec:v:41:y:2020:i:3:d:10.1007_s10834-020-09673-0
    DOI: 10.1007/s10834-020-09673-0
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    More about this item

    Keywords

    Quality of life; Older people; Stock market participation; Structural equation modelling; Psychometric properties;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • I00 - Health, Education, and Welfare - - General - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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