Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/206640
Authors: 
Betzer, André
Limbach, Peter
Rau, P. Raghavendra
Schürmann, Henrik
Year of Publication: 
2019
Series/Report no.: 
CFR Working Paper 19-01
Abstract: 
We show a long-lasting association between a common societal phenomenon, early-life family disruption, and investment behavior. Fund managers who experienced the death or divorce of their parents during childhood take lower risk and are more likely to sell their holdings following riskincreasing firm events. They make smaller tracking errors, hold fewer lottery stocks, and show a stronger disposition effect. The results strengthen as treatment intensifies, i.e., when disruption occurred during formative years, when bereaved families had less social support, and after (unexpected) parental deaths. The evidence adds to our understanding of the role of social factors and "nurture" in finance.
Subjects: 
Disposition effect
Family disruption
Formative experience
Investor behavior
Risk-taking
Social finance
JEL: 
G11
G23
G41
Document Type: 
Working Paper

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