Working Paper: CEPR ID: DP8113
Authors: Dimitris Christelis; Dimitris Georgarakos; Michalis Haliassos
Abstract: This paper provides the first joint analysis of household stockholding participation, location among stockholding modes, and participation spillovers. Our model matches observed participation, conditional and unconditional, and asset location patterns. We find that financial sophistication correlates strongly only with direct stockholding and mutual fund participation, while social interactions mainly influence stockholding through retirement accounts. Whether retirement account owners include stocks in them strongly depends on owner characteristics, unlike with mutual fund owners and investment in stock funds. Stockholding is more common among retirement account owners, but mainly because of owner characteristics rather than spillovers from retirement account ownership.
Keywords: Asset Location; Household Finance; Multivariate Probit; Retirement Accounts
JEL Codes: E21; G11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| educational attainment (I21) | direct stockholding participation (G32) |
| working in the financial sector (G29) | direct stockholding participation (G32) |
| willingness to undertake financial risk (G11) | direct stockholding participation (G32) |
| federal marginal tax rate (H29) | direct stockholding participation (G32) |
| retirement account ownership (D14) | direct stockholding participation (G32) |
| social interactions (Z13) | retirement account ownership (D14) |