The Effect of Academic Background on Household Portfolio Selection: Evidence from Japanese Repeated Cross Section Data
AbstractThis paper investigates whether the participation costs play an important role in explaining the households' limited stock market participation in Japan. In order to identify such costs, we focus on the difference of stock holding probability between two household groups whose financial literacy are a priori considered to be different: college-graduate households and non-college-graduate households. Our empirical analysis is utilizing Fairlie (1999, 2005)'s Blinder-Oaxaca decomposition technique in order to decompose the differences that observed in the Japanese repeated cross section survey data. Estimation results show that (1) the participation probability amounts to 35% for college-graduate households, while 18% of non-college-graduate households have stocks, (2) only 30-50% of the differences can be explained by the social and economic attributes, especially by income, wealth and the size of household heads' place of work. These findings imply the existence of participation costs based on the financial literacy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd10-149.
Date of creation: Aug 2010
Date of revision:
Limited market participation; participation costs; Blinder-Oaxaca decomposition;
Find related papers by JEL classification:
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Hiroshi Fujiki & Naohisa Hirakata & Etsuro Shioji, 2012. "Aging and Household Stockholdings: Evidence from Japanese Household Survey Data," IMES Discussion Paper Series 12-E-17, Institute for Monetary and Economic Studies, Bank of Japan.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatsuji Makino).
If references are entirely missing, you can add them using this form.