Temperance in stock market participation: evidence from France


Arrondel, Luc, Calvo Pardo, Hector and Oliver, Xisco (2010) Temperance in stock market participation: evidence from France. Economica, 77, (306), 314-333. (doi:10.1111/j.1468-0335.2008.00733.x).

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Description/Abstract

We explore empirically whether earnings uncertainty and borrowing constraints deter households from the stock market, consistent with the predictions of theoretical studies of portfolio choice in the presence of uninsurable earnings. Since recent extensions highlight the importance of the correlation between earnings and financial risks, here we use a self-assessed proxy from the DELTA-TNS 2002 cross-sectional survey to empirically assess the impact. Although income risk does not affect the participation decision of households' reporting a negative correlation, it does lower the participation of those who report a non-negative sign, consistent with economic theory predictions.

Item Type: Article
ISSNs: 0013-0427 (print)
1468-0335 (electronic)
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 65405
Date Deposited: 09 Feb 2009
Last Modified: 27 Mar 2014 18:46
URI: http://eprints.soton.ac.uk/id/eprint/65405

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