Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129650
Authors: 
Briggs, Joseph
Cesarini, David
Lindqvist, Erik
Östling, Robert
Year of Publication: 
2015
Series/Report no.: 
IFN Working Paper 1092
Abstract: 
We estimate the causal effect of wealth on stock market participation using administrative data on Swedish lottery players. A $150,000 windfall gain increases stock ownership probability among pre-lottery non-participants by 12 percentage points, while pre-lottery stock holders are unaffected. The effect is immediate, seemingly permanent and heterogeneous in intuitive ways. Standard lifecycle models predict wealth effects far too large to match our causal estimates under common calibrations. Additional analyses suggest a limited role for explanations such as procrastination or real-estate investment. Overall, results suggest that "nonstandard" beliefs or preferences contribute to the nonparticipation of households across many demographic groups.
Subjects: 
Stock market participation
Portfolio choice
Household finance
JEL: 
D1
G02
G11
Document Type: 
Working Paper

Files in This Item:
File
Size
378.22 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.