Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/43266
Authors: 
Christelis, Dimitris
Jappelli, Tullio
Padula, Mario
Year of Publication: 
2008
Series/Report no.: 
CFS Working Paper 2008/35
Abstract: 
We study the relation between cognitive abilities and stockholding using the recent Survey of Health, Ageing and Retirement in Europe (SHARE), which has detailed data on wealth and portfolio composition of individuals aged 50+ in 11 European countries and three indicators of cognitive abilities: mathematical, verbal fluency, and recall skills. We find that the propensity to invest in stocks is strongly associated with cognitive abilities, for both direct stock market participation and indirect participation through mutual funds and retirement accounts. Since the decision to invest in less information-intensive assets (such as bonds) is less strongly related to cognitive abilities, we conclude that the association between cognitive abilities and stockholding is driven by information constraints, rather than by features of preferences or psychological traits.
Subjects: 
Cognitive Abilities
Stockholding
Portfolio Choice
JEL: 
E2
D8
G1
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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