Stock market aversion? Political preferences and stock market participation

Kaustia, Markku; Torstila, Sami

doi:10.1016/j.jfineco.2010.10.017

Cited by 183 publications

(50 citation statements)

References 46 publications

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“…In their study on Germany, Bucher-Koenen and consider exposure to financial knowledge of others in the same region or financial literacy of the parents. The authors do not measure financial knowledge of others in the same region directly but use a quite crude proxy, namely political attitudes at the regional level, relying on previous evidence by Kaustia and Torstila (2010) that suggest an important role for political attitude in financial decision making. They find evidence of a positive association between financial literacy and retirement planning 5 and the magnitude of this is between three and thirteen times larger when they rely on the IV strategy, depending on the specification.…”

Section: Related Literaturementioning

confidence: 99%

Banks Information Policies, Financial Literacy and Household Wealth

2012

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We investigate the causal effect of financial literacy on financial assets, exploiting banks information policies for identification. In Italy, banks who belong to the PattiChiari consortium have implemented policies aimed at increasing transparency and procedural simplification. These policies may affect individuals' financial literacy without involving any direct cost for clients in terms of time, effort or resources, as we show in the paper. We exploit confidential information on whether individuals have their main bank account in one bank in the PattiChiari consortium to instrument their financial literacy level. We show that these policies have a positive and significant effect on both knowledge of financial instruments and household financial assets. Our results suggest that banks information policies have the potential to be an effective tool to increase individuals' financial literacy and that the relationship between financial literacy and wealth is largely underestimated by standard regression models.

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Section: Related Literaturementioning

confidence: 99%

Banks Information Policies, Financial Literacy and Household Wealth

2012

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“…The portfolio performance of one's social acquaintances is positively related to stock market participation (Kaustia and Knüpfer (2012)). Personal beliefs, such as trust in others (Guiso et al (2008)) and political ideology (Kaustia and Torstila (2011)) affect stock market participation. Cognitive ability (Cole andShastry (2009), Christelis et al (2010), Grinblatt et al (2011)) has a clear effect on stock market participation.…”

Section: Introductionmentioning

confidence: 99%

Personality traits and stock market participation

Conlin

Kyröläinen

Kaakinen

et al. 2015

Journal of Empirical Finance

112

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Abstract:We analyze the relationship between personality traits and stock market participation. Our sample comes from combining personality trait scores and socioeconomic status information from the Northern Finland Birth Cohort 1966 with data from Finnish Central Securities Depository, the official register of stock holdings in Finland. We find the traits, and especially the subscales of the traits, to be significant predictors of stock market participation. In particular, exploratory excitability, extravagance, sentimentality, and dependence have large effects. One-standard-deviation changes in the subscale scores have marginal effects of up to 4 percentage points on the probability of participating in the stock market.

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“…When a voting precinct stretches over adjacent zip codes we prorate the election results in the ratio of voting aged population at the intersection of the precinct and those zip codes. Kaustia and Torstila (2011) provide further details of the procedure.…”

Section: A Electionsmentioning

confidence: 99%

Stock Ownership and Political Behavior: Evidence from Demutualizations

2012

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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. Terms of use: Documents in EconStor may AbstractA setting in which customer-owned mutual companies converted to publicly listed firms created a plausibly exogenous shock to salience of stock ownership. We use this shock to identify the effect of stock ownership on political behavior. Using IV regressions, difference-in-differences analyses, and matching methods, we find the shock changed the way people vote in the affected areas, with the demutualizations being followed by a 1.7-2.7 percentage points increase in rightof-center vote share. Analyses of demutualizations that did not involve public listing of shares suggest that explanations based on wealth, liquidity, and tax-related incentives do not drive the results.

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Stock market aversion? Political preferences and stock market participation

Cited by 183 publications

References 46 publications

Banks Information Policies, Financial Literacy and Household Wealth

Banks Information Policies, Financial Literacy and Household Wealth

Personality traits and stock market participation

Stock Ownership and Political Behavior: Evidence from Demutualizations

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