Stock Market Participation and the Internet
AbstractTheory indicates that frictions (e.g., information and transaction costs) could account for the lower than expected stock market participation rates. This paper examines the hypothesis that there has been a fundamental change in participation and links this change to the reduction of these frictions by the advent of the Internet. Using panel data on household participation rates over the past decade, the results show computer/Internet using households raised participation substantially more than non-computer using households. The increased probability of participation was equivalent to having over $27,000 in additional household income or over 2.5 more mean years of education.
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Bibliographic InfoPaper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 127044.
Date of creation: 2006
Date of revision:
Public Economics; D14; G10;
Find related papers by JEL classification:
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
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