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Stockholding: From Participation to Location and to Participation Spillovers

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Author Info
Dimitrios Christelis () (University of Salerno and CSEF)
Dimitris Georgarakos (Goethe University Frankfurt and CFS)
Michael Haliassos (Goethe University Frankfurt, CEPR, CFS, MEA, NETSPAR)

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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 of 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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Publisher Info
Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 230.

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Date of creation: 03 Jun 2009
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Handle: RePEc:sef:csefwp:230

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Related research
Keywords: Stockholding; asset location; retirement accounts; household finance; multivariate probit; simulated maximum likelihood;

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Find related papers by JEL classification:
G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
D14 - Microeconomics - - Household Behavior - - - Personal Finance
C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models

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