Stock holdings over the life cycle: Who hesitates to join the market?

Zhang, Linwan, Wu, Weixing, Wei, Ying and Pan, Rulu (2015) Stock holdings over the life cycle: Who hesitates to join the market?. Economic Systems, 39 3: 423-438. doi:10.1016/j.ecosys.2015.05.001

Author Zhang, Linwan
Wu, Weixing
Wei, Ying
Pan, Rulu
Title Stock holdings over the life cycle: Who hesitates to join the market?
Journal name Economic Systems
ISSN 0939-3625
Publication date 2015-09-01
Year available 2015
Sub-type Article (original research)
DOI 10.1016/j.ecosys.2015.05.001
Open Access Status Not Open Access
Volume 39
Issue 3
Start page 423
End page 438
Total pages 16
Place of publication Amsterdam, Netherlands
Publisher Elsevier
Language eng
Abstract In this paper, we study the empirical relationship between age and individual wealth held in stocks, focusing on the heterogeneity of risk-taking over the life cycle in the population. We use micro-data and nonparametric quantile regression to argue that there is a pronounced life cycle pattern of risk-taking for households, which is conditional upon ownership. Specifically, we show that the fraction of stock investment decreases to bottom significantly in midlife and increases afterwards, contradicting the popular evidence claiming a hump-shaped pattern. The pressure of large financial obligations during middle age may be the reason for the crowding out of stock market risk-taking and could induce low capital returns for households.
Keyword Life cycle
Stock market participation
Nonparametric quantile regression
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2016 Collection
UQ Business School Publications
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