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Are Economists More Likely to Hold Stocks?

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Author Info
Charlotte Christiansen
Juanna Schröter Joensen
Jesper Rangvid

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Abstract

Using a large panel data set containing detailed information on educational attainments as well as financial and socioeconomic variables for individual investors, we show that economists are more likely to hold stocks than otherwise identical investors. First, we consider the change in stockholdings associated with (i) completing an economics education and (ii) an economist moving into the household. Second, we model stock market participation using a probit model with unobserved individual heterogeneity. Third, instrumental variables estimation allows us to identify the causal effect of an economics education on stock market participation. Throughout, we focus explicitly on the effect of a change in educational status on the likelihood of holding stocks. Copyright 2007, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/rof/rfm026
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Publisher Info
Article provided by Oxford University Press for European Finance Association in its journal Review of Finance.

Volume (Year): 12 (2007)
Issue (Month): 3 ()
Pages: 465-496
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Handle: RePEc:oup:revfin:v:12:y:2007:i:3:p:465-496

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  5. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January. [Downloadable!] (restricted)
  6. Massimo Massa & Andrei Simonov, 2006. "Hedging, Familiarity and Portfolio Choice," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 19(2), pages 633-685. [Downloadable!] (restricted)
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  9. Joël Peress, 2004. "Wealth, Information Acquisition, and Portfolio Choice," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 17(3), pages 879-914. [Downloadable!] (restricted)
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  13. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Blackwell Publishing, vol. 47(1), pages 225-38, January. [Downloadable!] (restricted)
  14. Ignacio Palacios-Huerta, 2001. "The Human Capital of Stockholders and the International Diversification Puzzle," Working Papers 2001-12, Brown University, Department of Economics.
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  15. Robert J. Willis & Sherwin Rosen, 1980. "Education and Self-Selection," NBER Working Papers 0249, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Luis M. Viceira, 1999. "Optimal Portfolio Choice for Long-Horizon Investors with Nontradable Labor Income," NBER Working Papers 7409, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  17. Haliassos, Michael & Bertaut, Carol C, 1995. "Why Do So Few Hold Stocks?," Economic Journal, Royal Economic Society, vol. 105(432), pages 1110-29, September. [Downloadable!] (restricted)
  18. Joshua D. Coval & Tobias J. Moskowitz, 1999. "Home Bias at Home: Local Equity Preference in Domestic Portfolios," Journal of Finance, American Finance Association, vol. 54(6), pages 2045-2073, December. [Downloadable!] (restricted)
  19. Fatih Guvenen & Burhanettin Kuruscu, 2006. "Does Market Incompleteness Matter for Asset Prices?," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 484-492, 04-05. [Downloadable!] (restricted)
  20. Arcidiacono, Peter, 2004. "Ability sorting and the returns to college major," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 343-375. [Downloadable!] (restricted)
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  21. Bernheim, B. Douglas & Garrett, Daniel M., 2003. "The effects of financial education in the workplace: evidence from a survey of households," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1487-1519, August. [Downloadable!] (restricted)
  22. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier. [Downloadable!] (restricted)
  23. Luigi Guiso & Michael Haliassos & Tullio Jappelli, 2002. "Household Stockholding in Europe: Where Do We Stand and Where Do We Go?," CSEF Working Papers 88, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
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  24. Carneiro, Pedro & Hansen, Karsten T. & Heckman, James J., 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College Choice," IZA Discussion Papers 767, Institute for the Study of Labor (IZA). [Downloadable!]
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  25. Mankiw, N. Gregory & Zeldes, Stephen P., 1991. "The consumption of stockholders and nonstockholders," Journal of Financial Economics, Elsevier, vol. 29(1), pages 97-112, March. [Downloadable!] (restricted)
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  26. Duflo, Esther & Saez, Emmanuel, 2002. "Participation and investment decisions in a retirement plan: the influence of colleagues' choices," Journal of Public Economics, Elsevier, vol. 85(1), pages 121-148, July. [Downloadable!] (restricted)
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  1. Charlotte Christiansen & Juanna Schröter Joensen & Helena Skyt Nielsen, 2006. "The Risk-Return Trade-Off in Human Capital Investment," IZA Discussion Papers 1962, Institute for the Study of Labor (IZA). [Downloadable!]
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