Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278944 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16246
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper introduces a key factor influencing households' decision to invest in the stock market: how people view stockholders. Using surveys we conducted with nearly 8,500 individuals from eleven countries, we document that a large majority of respondents view stockholders negatively – they are perceived as greedy, gambler-like, and selfish individuals. We then provide experimental evidence that such perceptions of identity-relevant characteristics causally influence decision- making: if people view stockholders more negatively, they are less likely to choose stock-related investments. Furthermore, by linking survey and administrative data, we show that negative perceptions strongly predict households' stock market participation, more so than leading alternative determinants. Our findings provide a novel explanation for the puzzlingly low stock market participation rates around the world, new perspectives on the malleability of financial decision-making, and evidence for the importance of identity in economic decision-making.
Subjects: 
identity
perceptions
stock market participation
financial decision-making
JEL: 
G41
G51
D14
D83
Document Type: 
Working Paper

Files in This Item:
File
Size





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