Working Paper: NBER ID: w0948
Authors: Martin Feldstein; Shlomo Yitzhaki
Abstract: This paper presents evidence that the corporate stock owned by high income investors appreciates substantially faster than the stock owned by investors with lower incomes. Those with very high incomes enjoy the greatest success on their investments while those with incomes under $20,000 have the least success. The evidence indicates that the differences are large and that they have persisted for a long time.
Keywords: Income; Stock Market; Capital Gains; Investment Returns
JEL Codes: G11; H24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher income individuals (D31) | Delay realizing capital gains (H24) |
| Stock market returns (G17) | Capital gains realization bias (G41) |
| Income level (D31) | Stock market returns (G17) |
| Income level (D31) | Rates of return on investments (G11) |