IDEAS home Printed from
   My bibliography  Save this article

Equity culture and household behavior


  • Michael Haliassos
  • Christis Hassapis


Equity culture has spread among households on both sides of the Atlantic. We study likely effects of equity culture on the behavior of households entering the stock market. Without borrowing constraints, the improved prospects arising from the equity premium tend to dominate the increase in riskiness of future income streams. This encourages entrants to increase consumption, borrowing, and precautionary wealth accumulation, and to reduce net financial wealth. Whether borrowing-constrained entrants will tend to increase consumption depends on risk aversion and on constraint tightness. Borrowing constraints can reduce, eliminate, or reverse the tendency of entrants to hold larger precautionary wealth buffers. Copyright 2002, Oxford University Press.

Suggested Citation

  • Michael Haliassos & Christis Hassapis, 2002. "Equity culture and household behavior," Oxford Economic Papers, Oxford University Press, vol. 54(4), pages 719-745, October.
  • Handle: RePEc:oup:oxecpp:v:54:y:2002:i:4:p:719-745

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    1. Marion, Nancy P., 1984. "Nontraded goods, oil price increases and the current account," Journal of International Economics, Elsevier, vol. 16(1-2), pages 29-44, February.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Luigi Guiso & Michael Haliassos & Tullio Jappelli, 2003. "Household stockholding in Europe: where do we stand and where do we go?," Economic Policy, CEPR;CES;MSH, vol. 18(36), pages 123-170, April.
    2. Kapteyn, Arie & Teppa, Federica, 2011. "Subjective measures of risk aversion, fixed costs, and portfolio choice," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 564-580, August.
    3. Kapteyn, A. & Teppa, F., 2002. "Subjective Measures of Risk Aversion and Portfolio Choice," Discussion Paper 2002-11, Tilburg University, Center for Economic Research.
    4. Sònia Muñoz, 2006. "Wealth Effects in Europe; A Tale of Two Countries (Italy and the United Kingdom)," IMF Working Papers 06/30, International Monetary Fund.
    5. Antonio Torrero Mañas, 2005. "The increasing relevance of the stock market in the world: A new scenario," Working Papers 01/05, Instituto Universitario de Análisis Económico y Social.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:54:y:2002:i:4:p:719-745. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.