IDEAS home Printed from https://ideas.repec.org/p/hhs/umnees/0866.html
   My bibliography  Save this paper

The Influence of Non-Cognitive and Cognitive Ability on Individuals’ Stock Market Participation

Author

Listed:
  • Gyllenram, André

    (Department of Economics, Umeå School of Business and Economics)

  • Hanes, Niklas

    (Department of Economics, Umeå School of Business and Economics)

  • Hellström, Jörgen

    (Umeå School of Business and Economics)

Abstract

Stock market participation is found to be positively related to cognitive, as well as non-cognitive ability, controlling for wealth, income, age, and other demographic and socioeconomic factors. Interestingly, the effects are of economic significant magnitudes, e.g. participation is on average 11.49% larger among those with high compared with low cognitive and non-cognitive abilities, and holds also when controlling for individuals risk preferences. The later indicates that cognitive and non-cognitive abilities have a role in affecting financial decisions also through non-preference driven effects. Limitations in non-cognitive ability do further explain non-participation among affluent individuals.

Suggested Citation

  • Gyllenram, André & Hanes, Niklas & Hellström, Jörgen, 2013. "The Influence of Non-Cognitive and Cognitive Ability on Individuals’ Stock Market Participation," Umeå Economic Studies 866, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:0866
    as

    Download full text from publisher

    File URL: http://www.econ.umu.se/DownloadAsset.action?contentId=222016&languageId=3&assetKey=ues866
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Household finance; Investor behavior; Stock market participation; Psychological traits; Intelligence; Risk preferences;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:umnees:0866. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David Skog (email available below). General contact details of provider: https://edirc.repec.org/data/inumuse.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.