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Differences in Portfolios across Countries: Economic Environment versus Household Characteristics

Author

Listed:
  • Dimitris Christelis

    (CSEF and CFS)

  • Dimitris Georgarakos

    (Goethe University Frankfurt and CFS)

  • Michael Haliassos

    (Goethe University Frankfurt, CFS and CEPR)

Abstract

We use cross-country microdata and counterfactual methods to document international differences in ownership and holdings of stocks, private businesses, homes, and mortgages among older households in thirteen countries. We decompose these differences into two parts, related to population characteristics and economic environments. Shortly prior to the recent financial crisis, U.S. households tended to invest more in stocks and less in homes and to have larger mortgages than Europeans of similar characteristics. Differences in ownership and amounts are primarily linked to differences in economic environments that are more pronounced among European countries than among U.S. regions, suggesting considerable potential for harmonization. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Dimitris Christelis & Dimitris Georgarakos & Michael Haliassos, 2013. "Differences in Portfolios across Countries: Economic Environment versus Household Characteristics," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 220-236, March.
  • Handle: RePEc:tpr:restat:v:95:y:2013:i:1:p:220-236
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    References listed on IDEAS

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    1. John Y. Campbell & João F. Cocco, 2003. "Household Risk Management and Optimal Mortgage Choice," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1449-1494.
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    More about this item

    Keywords

    household finance; aging; stockholding; private business; housing; mortgages; counterfactual decompositions;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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