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- Title
Temperance in Stock Market Participation: Evidence from France.
- Authors
ARRONDEL, LUC; PARDO, HECTOR CALVO; OLIVER, XISCO
- 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.
- Subjects
STOCK exchanges; WAGES; RISK aversion; HOUSEHOLDS; ECONOMIC equilibrium; SAVINGS accounts; STOCKS (Finance); TREASURY bills
- Publication
Economica, 2010, Vol 77, Issue 306, p314
- ISSN
0013-0427
- Publication type
Article
- DOI
10.1111/j.1468-0335.2008.00733.x