Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161030
Authors: 
Salamanca, Nicolas
de Grip, Andries
Fouarge, Didier
Montizaan, Raymond
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10407
Abstract: 
We show that household heads with a strong internal economic locus of control are more likely to hold equity and hold a larger share of equity in their investment portfolio. This relation holds when we control for economic preferences and possible confounders such as financial literacy, overconfidence, optimism, trust, and other personality traits. We argue that this relation is driven by a link between internal economic locus of control and a lower perception of the risk of investing inequity. Those with a strong internal economic locus of control perceive less variance in equity, making these investments more attractive.
Subjects: 
household portfolios
personality traits
risk and time preferences
risk perception
JEL: 
G11
D14
D19
Document Type: 
Working Paper

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