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Stock Market Ownership Transitions

Author

Listed:
  • Yosef Bonaparte

    (Finance, CU Denver Business School, University of Colorado Denver, Denver, Colorado 80202)

  • George M. Korniotis

    (Finance, Miami Herbert Business School, University of Miami, Miami, Florida 33124)

  • Alok Kumar

    (Finance, Miami Herbert Business School, University of Miami, Miami, Florida 33124)

  • Alexander Michaelides

    (Finance, Imperial College London, London, Greater London SW72AZ, United Kingdom)

  • Yuxin Zhang

    (Finance, Accounting and Economics, Nottingham University Business School (China), University of Nottingham, Ningbo, Zhejiang 315104, China)

Abstract

A significant portion of U.S. households enters and exits investment accounts. Empirically, income and wealth changes are related to these transitions, with income changes not affecting the retired. A life cycle model with participation costs cannot match the observed ownership dynamics, but an extension with stock market crash better fits the average participation rate and ownership transitions of the middle-aged and retired. This extended model does not match the ownership dynamics of the young, which are better captured by a model with elevated income risk. Overall, these findings indicate that ownership transitions respond to wealth shocks across the life cycle, both in our model and the data.

Suggested Citation

  • Yosef Bonaparte & George M. Korniotis & Alok Kumar & Alexander Michaelides & Yuxin Zhang, 2025. "Stock Market Ownership Transitions," Management Science, INFORMS, vol. 71(6), pages 4977-5000, June.
    • Handle: RePEc:inm:ormnsc:v:71:y:2025:i:6:p:4977-5000
    DOI: 10.1287/mnsc.2023.00290
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