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Stockholding: From Participation to Location and to Participation Spillovers

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Author Info

  • Dimitris Christelis

    () (University of Salerno)

  • Dimitris Georgarakos

    () (Goethe University Frankfurt)

  • Michael Haliassos

    () (Goethe University Frankfurt)

Abstract

This paper provides a joint analysis of household stockholding participation, stock location among stockholding modes, and participation spillovers, using data from the US Survey of Consumer Finances. Our multivariate choice model matches observed participation rates, conditional and unconditional, and asset location patterns. Financial education and sophistication strongly affect direct stockholding and mutual fund participation, while social interactions affect stockholding through retirement accounts only. Household characteristics influence stockholding through retirement accounts conditional on owning retirement accounts, unlike what happens with stockholding through mutual funds. Although stockholding is more common among retirement account owners, this fact is mainly due to their characteristics that led them to buy retirement accounts in the first place rather than to any informational advantages gained through retirement account ownership itself. Finally, our results suggest that, taking stockholding as given, stock location is not arbitrary but crucially depends on investor characteristics.

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Bibliographic Info

Paper provided by Center for Financial Studies in its series CFS Working Paper Series with number 2009/02.

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Length: 53 pages
Date of creation: 03 Oct 2009
Date of revision:
Handle: RePEc:cfs:cfswop:wp200902

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Keywords: Stockholding; Asset Location; Retirement Accounts; Household Finance; Multivariate Probit; Simulated Maximum Likelihood.;

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