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Stockholding: From Participation to Location and to Participation Spillovers

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  • Dimitris Christelis

    ()
    (Department of Economics, University Of Venice Cà Foscari)

  • Dimitris Georgarakos

    ()
    (Department of Money and Macroeconomics, Goethe University Frankfurt)

  • Michael Haliassos

    ()
    (Department of Money and Macroeconomics, Goethe University Frankfurt)

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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Bibliographic Info

Paper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2010_17.

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Length: 49
Date of creation: 2010
Date of revision:
Handle: RePEc:ven:wpaper:2010_17

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

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Cited by:
  1. Christelis, Dimitris & Georgarakos, Dimitris, 2009. "Investing at home and abroad: Different costs, different people," CFS Working Paper Series, Center for Financial Studies (CFS) 2009/28, Center for Financial Studies (CFS).

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