IDEAS home Printed from https://ideas.repec.org/a/tpr/jeurec/v5y2007i2-3p369-379.html
   My bibliography  Save this article

Expected Equity Returns and Portfolio Choice: Evidence from the Health and Retirement Study

Author

Listed:
  • Jeff Dominitz
  • Charles F. Manski

Abstract

To provide an empirical basis for the study of expectations, we have undertaken survey research measuring in probabilistic terms the beliefs that Americans hold about equity returns in the year ahead. This paper presents new findings on the expected returns reported in the 2004 Health and Retirement Study. We find substantial heterogeneity of reported beliefs, but, strikingly, nearly two-thirds of respondents report no better than a 50-50 chance of a positive nominal return. As in our earlier work, expected returns decline with age and are higher for men than for women. We find here that the probability of holding stocks increases substantially as the perceived chance of a positive return increases. These findings are potentially of considerable importance for portfolio choice. (JEL: G1, D1, D8) (c) 2007 by the European Economic Association.

Suggested Citation

  • Jeff Dominitz & Charles F. Manski, 2007. "Expected Equity Returns and Portfolio Choice: Evidence from the Health and Retirement Study," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 369-379, 04-05.
  • Handle: RePEc:tpr:jeurec:v:5:y:2007:i:2-3:p:369-379
    as

    Download full text from publisher

    File URL: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1542-4774/issues
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • D1 - Microeconomics - - Household Behavior
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

    Statistics

    Access and download statistics

    Corrections

    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:tpr:jeurec:v:5:y:2007:i:2-3:p:369-379. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.