Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/218962 
Year of Publication: 
2020
Series/Report no.: 
SAFE Working Paper No. 280
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
This paper studies why investors buy dividend-paying assets and how they time their consumption accordingly. We combine administrative bank data linking customers' consumption transactions and income to detailed portfolio data and survey responses on financial behavior. We find that private consumption is excessively sensitive to dividend income. Investors across wealth, income, and age distributions increase spending precisely around days of dividend receipt. Importantly, the consumption response is driven by financially prudent investors who select dividend portfolios, anticipate dividend income, and plan consumption accordingly. Our results contribute to the literature on a dividend clientele and provide evidence of 'planned' excess sensitivity.
Subjects: 
Consumption
Stock market wealth
Dividends
Excess sensitivity
Self-control
Household finance
Retail investors
JEL: 
G50
G40
G11
D12
D14
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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