Arbeitspapier

Equity culture and the distribution of wealth

Wider participation in stockholding is often presumed to reduce wealth inequality. We measure and decompose changes in US wealth inequality between 1989 and 2001, a period of considerable spread of equity culture. Inequality in equity wealth is found to be important for net wealth inequality, despite equity's limited share. Our findings show that reduced wealth inequality is not a necessary outcome of the spread of equity culture. We estimate contributions of stockholder characteristics to levels and inequality in equity holdings, and we distinguish changes in configuration of the stockholder pool from changes in the influence of given characteristics. Our estimates imply that both the 1989 and the 2001 stockholder pools would have produced higher equity holdings in 1998 than were actually observed for 1998 stockholders. This arises from differences both in optimal holdings and in financial attitudes and practices, suggesting a dilution effect of the boom followed by a cleansing effect of the downturn. Cumulative gains and losses in stockholding are shown to be significantly influenced by length of household investment horizon and portfolio breadth but, controlling for those, use of professional advice is either insignificant or counterproductive.

Sprache
Englisch

Erschienen in
Series: CFS Working Paper ; No. 2005/20

Klassifikation
Wirtschaft
Macroeconomics: Consumption; Saving; Wealth
Portfolio Choice; Investment Decisions
Thema
Wealth distribution
inequality
stockholding
equity culture

Ereignis
Geistige Schöpfung
(wer)
Bilias, Yannis
Georgarakos, Dimitris
Haliassos, Michael
Ereignis
Veröffentlichung
(wer)
Goethe University Frankfurt, Center for Financial Studies (CFS)
(wo)
Frankfurt a. M.
(wann)
2005

Handle
URN
urn:nbn:de:hebis:30-15195
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Bilias, Yannis
  • Georgarakos, Dimitris
  • Haliassos, Michael
  • Goethe University Frankfurt, Center for Financial Studies (CFS)

Entstanden

  • 2005

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