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Analysis of deviance in household financial portfolio choice: evidence from Spain

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  • Callado Muñoz, Francisco Jose
  • González Chapela, Jorge
  • Utrero González, Natalia

Abstract

We analyze empirically the household financial portfolio allocation decision using a variance decomposition technique that takes into account the constrained, non-normal nature of household portfolio allocation observations. We apply the technique to a relatively wide collection of financial assets. Results show that the main factors underlying household financial portfolio choice in Spain are age and net wealth. Among others, there is also evidence of sizeable risk aversion, education, and income effects, but very modest effects are associated to family size and having accounts in stand-alone Internet banks. Implications for policy are also derived.

Suggested Citation

  • Callado Muñoz, Francisco Jose & González Chapela, Jorge & Utrero González, Natalia, 2014. "Analysis of deviance in household financial portfolio choice: evidence from Spain," MPRA Paper 57497, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:57497
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    More about this item

    Keywords

    household portfolio; analysis of deviance; Spanish Survey of Household Finances;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D10 - Microeconomics - - Household Behavior - - - General
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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