Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324971 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11980
Publisher: 
CESifo GmbH, Munich
Abstract: 
We revisit the puzzle of limited stock market participation using qualitative methods common in other social sciences but rare in economics. Through in-depth interviews with investors and non-investors in Germany–a high-income country with low market participation–we elicit open-ended reflections on money without mentioning investing upfront. This allows beliefs and barriers to emerge naturally. We analyze these interviews using traditional human-led content analysis, complemented with a large language model (LLM)-based approach. We validate our findings using a representative survey of more than 7,000 individuals. While many known factors appear, we uncover a pervasive misconception: participation is believed to require selecting "safe" stocks, avoiding "bad" ones, and timing the market through monitoring and frequent trading. This inflates perceived costs and deters participation. Some investors overcome these barriers with support from family, friends, or trusted advisors. Notably, even active investors hold these beliefs, suggesting the misconception influences both entry and behavior in the market.
Subjects: 
stock market participation
qualitative research
JEL: 
G40
G50
G51
G53
Document Type: 
Working Paper
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