Temperance in stock market participation: evidence from France
Temperance in stock market participation: evidence from France
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.
314-333
Arrondel, Luc
51a6cd5b-0df0-453f-b29e-09fd5dee03fa
Calvo Pardo, Hector
07a586f0-48ec-4049-932e-fb9fc575f59f
Oliver, Xisco
5b60dba7-ce11-4624-8c76-2e6b61afbd67
April 2010
Arrondel, Luc
51a6cd5b-0df0-453f-b29e-09fd5dee03fa
Calvo Pardo, Hector
07a586f0-48ec-4049-932e-fb9fc575f59f
Oliver, Xisco
5b60dba7-ce11-4624-8c76-2e6b61afbd67
Arrondel, Luc, Calvo Pardo, Hector and Oliver, Xisco
(2010)
Temperance in stock market participation: evidence from France.
Economica, 77 (306), .
(doi:10.1111/j.1468-0335.2008.00733.x).
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.
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e-pub ahead of print date: 16 October 2008
Published date: April 2010
Organisations:
Economics
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Local EPrints ID: 65405
URI: http://eprints.soton.ac.uk/id/eprint/65405
ISSN: 0013-0427
PURE UUID: a851a6c8-76c2-45f5-95ce-3ac952039050
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Date deposited: 09 Feb 2009
Last modified: 14 Mar 2024 02:51
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Author:
Luc Arrondel
Author:
Xisco Oliver
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