Temperance in stock market participation: evidence from France

Arrondel, Luc, Calvo Pardo, Hector and Oliver, Xisco (2008) Temperance in stock market participation: evidence from France Economica, 77, (306), pp. 314-333. (doi:10.1111/j.1468-0335.2008.00733.x).


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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
Digital Object Identifier (DOI): doi:10.1111/j.1468-0335.2008.00733.x
ISSNs: 0013-0427 (print)
ePrint ID: 65405
Date :
Date Event
16 October 2008e-pub ahead of print
April 2010Published
Date Deposited: 09 Feb 2009
Last Modified: 18 Apr 2017 21:59
Further Information:Google Scholar
URI: http://eprints.soton.ac.uk/id/eprint/65405

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