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Household Portfolio Choice, Reference Dependence, and the Marriage Market

Listed author(s):
  • Li, Wenchao

    ()

    (National University of Singapore)

  • Song, Changcheng

    ()

    (National University of Singapore)

  • Xu, Shu

    ()

    (Southwestern University of Finance and Economics)

  • Yi, Junjian

    ()

    (National University of Singapore)

This paper bridges the financial market and the marriage market using a reference-dependent mechanism. Male-biased sex ratios induce families with sons to hold more risky assets, since competitive marital payment in a tight market raises the reference level of marriage expenditure for such families. Using the 2013 China Household Finance Survey data, we find that a 0.1 increase in the sex ratio raises the probability of participating in the stock market by 25.7 percent, or the stock share of liquid wealth by 42.7 percent for families with a son; there appears no effect for families with a daughter.

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File URL: http://ftp.iza.org/dp10528.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10528.

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Length: 52 pages
Date of creation: Jan 2017
Handle: RePEc:iza:izadps:dp10528
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  1. Pagel, Michaela, 2013. "Expectations-Based Reference-Dependent Life-Cycle Consumption," MPRA Paper 47138, University Library of Munich, Germany.
  2. Luca Benzoni & Pierre Collin-Dufresne & Robert S. Goldstein, 2007. "Portfolio Choice over the Life-Cycle when the Stock and Labor Markets Are Cointegrated," Journal of Finance, American Finance Association, vol. 62(5), pages 2123-2167, October.
  3. Thierry Post & Martijn J. van den Assem & Guido Baltussen & Richard H. Thaler, 2008. "Deal or No Deal? Decision Making under Risk in a Large-Payoff Game Show," American Economic Review, American Economic Association, vol. 98(1), pages 38-71, March.
  4. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
  5. Lei Feng & Mark Seasholes, 2005. "Do Investor Sophistication and Trading Experience Eliminate Behavioral Biases in Financial Markets?," Review of Finance, Springer, vol. 9(3), pages 305-351, 09.
  6. Terrance Odean, 1998. "Are Investors Reluctant to Realize Their Losses?," Journal of Finance, American Finance Association, vol. 53(5), pages 1775-1798, October.
  7. Soo Hong Chew & Junjian Yi & Junsen Zhang & Songfa Zhong, 2017. "Risk Aversion and Son Preference: Experimental Evidence from Chinese Twin Parents," Working Papers 2017-028, Human Capital and Economic Opportunity Working Group.
  8. Lei Feng & Mark S. Seasholes, 2005. "Do Investor Sophistication and Trading Experience Eliminate Behavioral Biases in Financial Markets?," Review of Finance, European Finance Association, vol. 9(3), pages 305-351.
  9. Wei Huang, 2015. "One-Child Policy, Marriage Distortion, and Welfare Loss," Working Papers id:7801, eSocialSciences.
  10. Lixing Li & Xiaoyu Wu, 2011. "Gender of Children, Bargaining Power, and Intrahousehold Resource Allocation in China," Journal of Human Resources, University of Wisconsin Press, vol. 46(2), pages 295-316.
  11. Hongbin Li & Junjian Yi & Junsen Zhang, 2011. "Estimating the Effect of the One-Child Policy on the Sex Ratio Imbalance in China: Identification Based on the Difference-in-Differences," Demography, Springer;Population Association of America (PAA), vol. 48(4), pages 1535-1557, November.
  12. Caeyers, Bet & Chalmers, Neil & De Weerdt, Joachim, 2012. "Improving consumption measurement and other survey data through CAPI: Evidence from a randomized experiment," Journal of Development Economics, Elsevier, vol. 98(1), pages 19-33.
  13. repec:oup:restud:v:84:y:2017:i:2:p:885-934. is not listed on IDEAS
  14. Lena Edlund & Hongbin Li & Junjian Yi & Junsen Zhang, 2013. "Sex Ratios and Crime: Evidence from China," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1520-1534, December.
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