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International Finance Discussion Papers
The International Finance Discussion Papers logo links to the International Finance Discussion Papers home page Stockholding Behavior of U.S. Households: Evidence from the 1983-89 Survey of Consumer Finances
Carol C. Bertaut

Abstract:  Most households persistently invest in riskless assets but not stocks, and may do so because they perceive the information required for market participation to be costly relative to expected benefits. In a CCAPM, increased risk aversion, income risk, and lower resources reduce the information expense sufficient to deter stockholding. Bivariate probit analysis using the 1983-89 Survey of Consumer Finances shows that households with lower risk aversion, higher education, and greater wealth who were nonstockholders in 1983 had an increased conditional probability of entering by 1989, while 1983 stockholders with lower resources, more limited education, and greater risk aversion were more likely to be nonstockholders by 1989.

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Last update: July 19, 2001