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Racial differences in expected stock market performance and stock ownership

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  • Hibbert, Ann Marie
  • Yang, Shanxiang

Abstract

There are significant racial differences in expectations regarding future stock market performance. Using data from the Federal Reserve Bank of New York’s Survey of Consumer Expectations from 2013 to 2022, we find that, relative to White Americans, Black and Hispanic Americans have lower probabilistic expectations that the stock market will increase. This racial gap in expectations was even larger during the recession caused by the Covid-19 epidemic, suggesting that economic uncertainty exacerbates this heterogeneity in expectations. Furthermore, we show that relative to White Americans, the likelihood and level of participation of Black and Hispanic Americans in the stock market are significantly more affected by their subjective beliefs about future market prices.

Suggested Citation

  • Hibbert, Ann Marie & Yang, Shanxiang, 2026. "Racial differences in expected stock market performance and stock ownership," Journal of Behavioral and Experimental Finance, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:beexfi:v:49:y:2026:i:c:s2214635025001145
    DOI: 10.1016/j.jbef.2025.101133
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    Keywords

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    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G50 - Financial Economics - - Household Finance - - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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