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Household stock market participation during the great financial crisis

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  • Zhou, Jie

Abstract

Using the Panel Study of Income Dynamics, this paper studies American households’ stock market participation in 2007–2009, a period that saw a major stock market downswing. After controlling for standard household characteristics, we estimate that the stock ownership in 2009 dropped 3.5 percentage points – a 7% decline – compared to that in 2007. We find evidence that less-educated households, poor households and households with nonwhite household heads are more likely to drop out of the market after the market crash. We also compare the change in the stock ownership during the crisis period with other 2-year periods over 2003–2013.

Suggested Citation

  • Zhou, Jie, 2020. "Household stock market participation during the great financial crisis," The Quarterly Review of Economics and Finance, Elsevier, vol. 75(C), pages 265-275.
    • Handle: RePEc:eee:quaeco:v:75:y:2020:i:c:p:265-275
    DOI: 10.1016/j.qref.2019.04.008
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    More about this item

    Keywords

    Household portfolios; Stock market participation; Financial crisis;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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