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How does changing age distribution impact stock prices? A nonparametric approach


  • Cheolbeom Park


This paper examines whether variations in demographic structure have influenced stock prices. The study employs a nonparametric approach based on the Fourier Flexible Form representation, which relates variations in the entire age distribution to the normalized stock price under a flexible functional form. The main findings of this paper are that there is a significant impact from prime working-age consumers on the stock price, and that this impact is robust for all G5 countries (France, Germany, Japan, the UK and the USA). These findings survive many robust tests, and are consistent with the predictions from the life‐cycle models. Copyright (C) 2009 John Wiley & Sons, Ltd.

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  • Cheolbeom Park, 2010. "How does changing age distribution impact stock prices? A nonparametric approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(7), pages 1155-1178, November/.
  • Handle: RePEc:jae:japmet:v:25:y:2010:i:7:p:1155-1178

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    References listed on IDEAS

    1. Parsons, Donald O, 1980. "The Decline in Male Labor Force Participation," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 117-134, February.
    2. Berkovec, James & Stern, Steven, 1991. "Job Exit Behavior of Older Men," Econometrica, Econometric Society, vol. 59(1), pages 189-210, January.
    3. Bound, John & Burkhauser, Richard V., 1999. "Economic analysis of transfer programs targeted on people with disabilities," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 51, pages 3417-3528 Elsevier.
    4. David C. Stapleton & Richard V. Burkhauser (ed.), 2003. "The Decline in Employment of People with Disabilities: A Policy Puzzle," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number depd, November.
    5. Halpern, Janice & Hausman, Jerry A., 1986. "Choice under uncertainty: A model of applications for the social security disability insurance program," Journal of Public Economics, Elsevier, vol. 31(2), pages 131-161, November.
    6. Benitez-Silva, Hugo & Buchinsky, Moshe & Chan, Hiu Man & Rust, John & Sheidvasser, Sofia, 1999. "An empirical analysis of the social security disability application, appeal, and award process," Labour Economics, Elsevier, vol. 6(2), pages 147-178, June.
    7. Jonathan Gruber & Jeffrey D. Kubik, 1994. "Disability Insurance Rejection Rates and the Labor Supply of Older Workers," NBER Working Papers 4941, National Bureau of Economic Research, Inc.
    8. Kreider, Brent, 1998. "Workers' Applications to Social Insurance Programs When Earnings and Eligibility Are Uncertain," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 848-877, October.
    9. John Bound & Richard Burkhauser & Austin Nichols, 2001. "Tracking the Household Income of SSDI and SSI Applicants," Working Papers wp009, University of Michigan, Michigan Retirement Research Center.
    10. Gruber, Jonathan & Kubik, Jeffrey D., 1997. "Disability insurance rejection rates and the labor supply of older workers," Journal of Public Economics, Elsevier, vol. 64(1), pages 1-23, April.
    11. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
    12. Kreider, Brent & Riphahn, Regina, 2000. "Explaining Applications to the U.S. Disability Program: A Semiparametric Approach," Staff General Research Papers Archive 5184, Iowa State University, Department of Economics.
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    Cited by:

    1. Yunus Aksoy & Tobias Grasl & Ron P Smith, 2012. "The economic impact of demographic structure in OECD countries," Birkbeck Working Papers in Economics and Finance 1212, Birkbeck, Department of Economics, Mathematics & Statistics.
    2. Chang, Yoosoon & Kim, Chang Sik & Miller, J. Isaac & Park, Joon Y. & Park, Sungkeun, 2016. "A new approach to modeling the effects of temperature fluctuations on monthly electricity demand," Energy Economics, Elsevier, vol. 60(C), pages 206-216.
    3. Yunus Aksoy & Ron P. Smith & Tobias Grasl & Henrique S. Basso, 2015. "Demographic structure and macroeconomic trends," Working Papers 1528, Banco de España;Working Papers Homepage.
    4. Chang, Yoosoon & Kim, Chang Sik & Miller, J. Isaac & Park, Joon Y. & Park, Sungkeun, 2014. "Time-varying Long-run Income and Output Elasticities of Electricity Demand with an Application to Korea," Energy Economics, Elsevier, vol. 46(C), pages 334-347.
    5. repec:spr:qualqt:v:51:y:2017:i:6:d:10.1007_s11135-016-0407-1 is not listed on IDEAS
    6. Yoosoon Chang & Chang Sik Kim & J. Isaac Miller & Joon Y. Park & Sungkeun Park, 2014. "Time-varying Long-run Income and Output Elasticities of Electricity Demand," Working Papers 1409, Department of Economics, University of Missouri.
    7. repec:gam:jecnmx:v:5:y:2017:i:4:p:53-:d:121445 is not listed on IDEAS

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