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Health and the share of wealth held in risky assets

Author

Listed:
  • Vega, Alejandro

    (Department of Economics, Umeå University)

  • Velli, Evangelia

    (Business Administration, Umeå School of Business, Economics and Statistics)

Abstract

This paper focuses on the correlation between negative health shocks and the households’ shareof wealth held in risky assets. By using U.S. data from the Health and Retirement Study, we try toestablish a link between negative health shocks and financial outcomes such as a household’s probabilityof owning risky assets and share of risky assets held. In our definition of a recent negative health shock,we include: cancer or malignant tumor diagnoses, stroke or transient ischemic attack, and heart attack,coronary heart disease, angina, congestive heart failure, or other heart problems. We find an importantnegative correlation between a negative health shock to the female and her household’s probabilityof owning risky assets and share of risky assets held, respectively. In contrast, we do not find acorresponding statistically significant correlation for males.

Suggested Citation

  • Vega, Alejandro & Velli, Evangelia, 2020. "Health and the share of wealth held in risky assets," Umeå Economic Studies 972, Umeå University, Department of Economics.
  • Handle: RePEc:hhs:umnees:0972
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    References listed on IDEAS

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    More about this item

    Keywords

    aging couples; health shock; household portfolio choice; share of risky assets; risky financial assets; Health and Retirement Study;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G50 - Financial Economics - - Household Finance - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General

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