Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/309897 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Asset Management [ISSN:] 1479-179X [Volume:] 23 [Issue:] 6 [Publisher:] Palgrave Macmillan [Place:] London [Year:] 2022 [Pages:] 477-503
Publisher: 
Palgrave Macmillan, London
Abstract: 
In this article, we assess whether German private investors gamble in the stock market. Other studies that have analyzed private investors' preferences with regard to lottery-like characteristics have used retail or discount brokerage data. They have shown that stock trading has common entertainment features with traditional gambling. In particular, clients of discount brokers may invest for speculative purposes and thus have disproportional preferences for lottery-like characteristics. In consequence, assessing preferences by solely using a subset of investors—associated brokerage clients—may lead to substantially biased results. We assess this issue by using SHS -base data from Deutsche Bundesbank which captures the aggregate holdings of the German private sector. In line with the research, we find that German private investors overinvest in stocks with lottery-like features. Yet, when assessing the economic significance of the aggregate overinvestment, the effect is negligible. Further, we do not find consistent evidence of skewness that positively affects the aggregate holdings of the private sector. As studies have identified preferences for skewness as a driving force for retail investors' stock purchases, our results challenge the preconceived notion of which characteristics actually induce (disproportional) private sector investments.
Subjects: 
Lottery stocks
Private sector holdings
JEL: 
G11
G12
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





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