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http://hdl.handle.net/10419/43266
  
Title:Cognitive abilities and portfolio choice PDF Logo
Authors:Christelis, Dimitris
Jappelli, Tullio
Padula, Mario
Issue Date: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:urn:nbn:de:hebis:30-60392
Document Type:Working Paper
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

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