Equity culture and household behavior
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.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" 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.
Volume (Year): 54 (2002)
Issue (Month): 4 (October)
|Contact details of provider:|| Postal: |
Fax: 01865 267 985
Web page: http://oep.oupjournals.org/
|Order Information:||Web: http://www.oup.co.uk/journals|
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)
If references are entirely missing, you can add them using this form.