PRELIMINARY AND INCOMPLETE – PLEASE DO NOT CIRCULATE FURTHER
| Title: | PRELIMINARY AND INCOMPLETE – PLEASE DO NOT CIRCULATE FURTHER |
|---|---|
| Authors: | Miguel Ampudia; Michael Ehrmann; Jel‐codes D |
| Contributors: | The Pennsylvania State University CiteSeerX Archives |
| Source: | http://www.ecb.europa.eu/events/pdf/conferences/131017/papers/Session_5_Ampudia.pdf. |
| Publication Year: | 2013 |
| Collection: | CiteSeerX |
| Subject Terms: | risk aversion; household finance; learning; portfolio choice; rare disasters |
| Description: | We show that experienced stock market returns exert statistically significant and economically substantial effects on households ’ risk aversion and portfolio decisions: better experiences lower risk aversion and increase stock market participation along the intensive and the extensive margin. We find that more distant experiences receive a somewhat lower (but still substantial) weight than the corresponding findings for the United States. Furthermore, there are additional effects stemming from the experience of extreme stock market downturns. Households in countries that witnessed a particularly severe 2008 stock market crash give substantially more weight to the most recent experience, suggesting that in these countries an even more pronounced underinvestment in the stock market should be expected in the years to come. The paper follows the methodology used by Malmendier and Nagel (2011) and it applies it to a novel dataset on household finances covering European households. |
| Document Type: | text |
| File Description: | application/pdf |
| Language: | English |
| Relation: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.462.3452; http://www.ecb.europa.eu/events/pdf/conferences/131017/papers/Session_5_Ampudia.pdf |
| Availability: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.462.3452; http://www.ecb.europa.eu/events/pdf/conferences/131017/papers/Session_5_Ampudia.pdf |
| Rights: | Metadata may be used without restrictions as long as the oai identifier remains attached to it. |
| Accession Number: | edsbas.83D3E076 |
| Database: | BASE |