Are Economists More Likely to Hold Stocks?

Christiansen, Charlotte; Rangvid, Jesper; Joensen, Juanna Schrøter

doi:10.2139/ssrn.698721

Cited by 89 publications

(76 citation statements)

References 40 publications

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“…However, exploiting the same variation in financial education between states, but with more data and a different model specification, Cole and Shastry (2009) find no effect of financial education on financial market participation. Similarly, Christiansen et al (2008) show that economists are more likely to hold stocks.…”

Section: Economics At Schoolmentioning

confidence: 96%

Childhood roots of financial literacy

Grohmann

Kouwenberg

Menkhoff

2015

Journal of Economic Psychology

175

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We use the concept of financial socialization and aim to represent three major agents of financial socialization: family, school and work. Thus we compile twelve relevant childhood characteristics in a new survey study and examine their relation to financial literacy, while controlling for established socio-demographic characteristics. We find in a mediation analysis that both family and school positively affect the financial literacy of adults. Moreover, financial literacy and school related variables also have a direct effect on financial behavior. This suggests that family factors and schooling work through complementary channels. Terms of use: Documents in EconStor may Childhood Roots of Financial Literacy 1 IntroductionMany economic decisions require basic knowledge of financial concepts, such as interest rates and inflation. However, many people lack this type of knowledge. The degree of this deficiency has been systematically researched using tests, which collect "financial literacy"scores. There is growing evidence that individuals who possess higher financial literacy have better economic outcomes as it improves financial decision making (e.g., Lusardi and Mitchell, 2014). At the same time, these studies also find that in many countries and many population groups, financial literacy levels are low. In the USA only 30.2% can answer all three of the standard financial literacy questions. This number is not much higher at 44.8% and 53.2% in the Netherlands and Germany respectively (Lusardi and Mitchell, 2014, BucherKoenen and Lusardi, 2011, van Rooij et al., 2011b Several variables have been found to be linked to a person's financial literacy. These factors include socio-demographic variables in the way that better education, higher age or higher incomes are related to higher financial literacy. Many of these factors seem to be at least partially shaped by childhood experiences of today's adults (see Lusardi et al., 2010).Indeed, several studies either look at the impact of some childhood experiences on financial behavior (e.g., Webley and Nyhus, 2013, Bucciol andVeronesi, 2014), or use a specific childhood variable as instrument for financial literacy (Behrman et al., 2010, 2012, van Rooij et al., 2011b. Thus many childhood variables have been considered in relation to financial literacy and financial behavior. What remains less clear is: what are the main channels through which childhood experiences affects financial literacy and financial be...

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Section: Economics At Schoolmentioning

confidence: 96%

Childhood roots of financial literacy

Grohmann

Kouwenberg

Menkhoff

2015

Journal of Economic Psychology

175

View full text Add to dashboard Cite

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“…Christiansen et al (2008) use a large register-based panel data set containing detailed information on Danish investors' education attainment, and financial and socioeconomic variables. The authors show that stockholding increases if individuals have completed an economics education program and if an economist becomes part of the household.…”

Section: Financial Literacy and Asset Accumulationmentioning

confidence: 99%

“…The authors show that stockholding increases if individuals have completed an economics education program and if an economist becomes part of the household. To sort out the double causality between portfolio choice and the decision to become an economist, Christiansen et al (2008) use better access to education due to the establishment of a new university, as an instrument for economics 2 In the context of developing countries, Cole et al (2009) analyze the relation between economic literacy and participation in formal financial markets. Using survey data on India and Indonesia, they show that financial literacy is a powerful predictor of demand for financial services.…”

Section: Financial Literacy and Asset Accumulationmentioning

confidence: 99%

Investment in financial literacy and saving decisions

Jappelli

Padula

2013

Journal of Banking & Finance

477

326

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“…The endogeneity and measurement issues are similar to those arising in studies that estimate the returns to schooling: any attempt to estimate the structural relation between schooling and wages must deal with the endogeneity of the schooling decision and measurement errors in the quantity and quality of education (Card, 2001). Some studies address these important econometric concerns by using an instrumental variables approach, see Christiansen et al (2008), Lusardi (2008), and Behrman et al (2012). In the next section we build on the insights in these paper and provide a theoretical framework to study the relation between financial literacy and portfolio choice; in successive sections we explore its empirical implications.…”

Section: Financial Sophistication and Portfolio Performancementioning

confidence: 99%

Investment in financial literacy, social security, and portfolio choice

Jappelli¹,

Padula²

2014

Journal of Pension Economics and Finance

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We present an intertemporal portfolio choice model where individuals invest in financial literacy, save, allocate their wealth between a safe and a risky asset, and receive a pension when they retire. Financial literacy affects the excess return from and cost of stock-market participation. Investors simultaneously choose how much to save, their portfolio allocation, and the optimal investment in financial literacy. The model implies that one should observe a positive correlation between stock-market participation (and risky asset share, conditional on participation) and financial literacy, and a negative correlation between the generosity of the social security system and financial literacy. The model also implies that financial literacy accumulated early in life is positively correlated with the individual's wealth and portfolio allocations in later life. Using microeconomic cross-country data, we find support for these predictions.

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Are Economists More Likely to Hold Stocks?

Cited by 89 publications

References 40 publications

Childhood roots of financial literacy

Childhood roots of financial literacy

Investment in financial literacy and saving decisions

Investment in financial literacy, social security, and portfolio choice

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