Behavioral Portfolio Choice: Limited Stock Market Participation and Heterogeneous Portfolio Composition
Pan, Chen (2009) Behavioral Portfolio Choice: Limited Stock Market Participation and Heterogeneous Portfolio Composition. [Dissertation (University of Nottingham only)] (Unpublished)
This dissertation studies two related puzzles in economic behavior, limited stock market participation and the heterogeneity in portfolio composition across households. It is aimed at evaluating the potential factors in terms of their ability to account for these puzzles. A set of household-level background risk exposures sourced from labor income and home equity are documented to explain some but not all aspects of the observed cross-sectional variation in portfolio choice. In particular, these background risks are statistically significant in determining a household’s stock market participation and portfolio allocation. Some demographic characteristics, such as age, education, wealth, mortgage loans are included as control variables and are estimated to exert great impact on households’ portfolio behavior.
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