Advanced Search
MyIDEAS: Login

Consistency of Diversification Patterns with Investors’ Risk Attitudes: Evidence from German Household Portfolios

Contents:

Author Info

  • Barasinska, Nataliya

    (DIW Berlin and European University Viadrina, Frankfurt(Oder))

  • Schäfer, Dorothea

    (DIW Berlin and Jönköping International Business School)

  • Stephan, Andreas

    ()
    (Jönköping International Business School, DIW Berlin, CESIS Stockholm)

Abstract

This paper explores the relationship between self-declared risk aversion of private investors and their willingness to hold diversified portfolios of financial assets. The analysis is based on household survey data from the German Socioeconomic Panel (SOEP) that provides a reliable measure of individual attitudes towards financial risk. Our findings suggest that more risk averse households tend to hold incomplete portfolios consisting mainly of a few risk free assets. We also find that the propensity to diversify is highly dependent on whether liquidity and safety needs are satisfied. We conclude from this evidence that households consider absence of liquidity and safety as opportunity cost of diversification that overcompensates the advantage of a possible overall reduction in investment risk.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Paper provided by Jönköping International Business School in its series JIBS Working Papers with number 2010-4.

as in new window
Length: 30 pages
Date of creation: 17 Nov 2010
Date of revision:
Handle: RePEc:hhb:hjacfi:2010_004

Contact details of provider:
Postal: Jönköping International Business School, P.O. Box 1026, SE-551 11 Jönköping, Sweden
Phone: 036-157700
Fax: 036-165069
Web page: http://www.jibs.hj.se/
More information through EDIRC

Related research

Keywords: private households; financial behavior; portfolio diversification; risk aversion;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhb:hjacfi:2010_004. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Susanne Hansson) or (Stefan Carlstein).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.