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Portfolio Allocation over the Life Cycle: Evidence from Swedish Household Data

  • Andersson, Björn

    ()

    (Department of Economics)

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    This paper provides empirical evidence on life-cycle patterns in the asset allocation of Swedish households. Data on household portfolio allocation are collected from the HINK surveys for the period 1982-1992, and portfolio shares of different asset categories are regressed on age, period, and cohort dummies as well as socio-economic and demographic variables. There are evident differences in the age profiles for the demand of different assets. The fraction of "risky" financial assets follows a hump-shaped age profile, as does the share of total real assets. While the probability of ownership of "safe" financial assets increases over life, the weight in the portfolio has a U-shaped age pattern. This is also true for the fraction of total financial assets. Furthermore, there are differences in the asset allocation of different birth cohorts; the portfolio weight of real assets is relatively higher for the "baby-boom" generation, while younger generations are more prone to invest in "risky" financial assets.

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    File URL: http://www.nek.uu.se/pdf/2001wp4.pdf
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    Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2001:4.

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    Length: 33 pages
    Date of creation: 01 Feb 2001
    Date of revision:
    Handle: RePEc:hhs:uunewp:2001_004
    Contact details of provider: Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
    Phone: + 46 18 471 25 00
    Fax: + 46 18 471 14 78
    Web page: http://www.nek.uu.se/
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