Social Interaction and Stock Market Participation: Evidence from British Panel Data
AbstractThis paper uses data from the British National Child Development Study to investigate the relationship between social interaction and participation in the stock market through holding stocks and/or shares at the individual level. In accordance with the existing literature, the results reveal that a positive relationship exists between social interaction and stock market participation, when both are measured concurrently. Furthermore, this relationship prevails across a range of measures of social interaction and social capital. In addition, we make a potentially important contribution to the existing literature by exploiting the panel nature of the data in order to explore the robustness of the cross-sectional findings. We find that the positive relationship between stock market participation and social interaction prevails within a fixed effects logit framework, which controls for time invariant unobserved effects.
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Bibliographic InfoPaper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2010008.
Length: 28 pages
Date of creation: Apr 2010
Date of revision: Apr 2010
Social Capital; Social Interaction; Stock Market Participation;
Other versions of this item:
- Brown, Sarah & Taylor, Karl, 2010. "Social Interaction and Stock Market Participation: Evidence from British Panel Data," IZA Discussion Papers 4886, Institute for the Study of Labor (IZA).
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-29 (All new papers)
- NEP-LAB-2010-05-29 (Labour Economics)
- NEP-SOC-2010-05-29 (Social Norms & Social Capital)
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