Arbeitspapier

Cognitive abilities and portfolio choice

We study the relation between cognitive abilities and stockholding using the recent Survey of Health, Ageing and Retirement in Europe (SHARE), which has detailed data on wealth and portfolio composition of individuals aged 50+ in 11 European countries and three indicators of cognitive abilities: mathematical, verbal fluency, and recall skills. We find that the propensity to invest in stocks is strongly associated with cognitive abilities, for both direct stock market participation and indirect participation through mutual funds and retirement accounts. Since the decision to invest in less information-intensive assets (such as bonds) is less strongly related to cognitive abilities, we conclude that the association between cognitive abilities and stockholding is driven by information constraints, rather than by features of preferences or psychological traits.

Language
Englisch

Bibliographic citation
Series: CFS Working Paper ; No. 2008/35

Classification
Wirtschaft
Subject
Cognitive Abilities
Stockholding
Portfolio Choice
Persönlichkeitspsychologie
Kognition
Kapitalanlage
Anlageverhalten
Kapitalertrag
Vermögen
Europa

Event
Geistige Schöpfung
(who)
Christelis, Dimitris
Jappelli, Tullio
Padula, Mario
Event
Veröffentlichung
(who)
Goethe University Frankfurt, Center for Financial Studies (CFS)
(where)
Frankfurt a. M.
(when)
2008

Handle
URN
urn:nbn:de:hebis:30-60392
Last update
10.03.2025, 11:43 AM CET

Data provider

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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Christelis, Dimitris
  • Jappelli, Tullio
  • Padula, Mario
  • Goethe University Frankfurt, Center for Financial Studies (CFS)

Time of origin

  • 2008

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