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- Title
Do Behavioral Biases Vary across Individuals? Evidence from Individual Level 401 (k) Data.
- Abstract
This paper investigates whether some individuals are prone to behavioral biases in their 40l(k] investments. Using demographic data and allocation information for over 73,000 employees, I examine two allocation biases and a participation bias. The findings suggest that higher salaried employees tend to make significantly better choices. Participants who earn $100,000 hold 12. 7% less in company stock, are 3% less likely to follow the framing 1/n heuristic, and are 37. 7% more likely to participate than those earning $46,000. Women make better choices in two of the three cases and I find evidence of mental accounting.
- Subjects
CORPORATE finance; INVESTORS; INDIVIDUAL investors; 401(K) plans; INDIVIDUAL retirement accounts; NONDISCRIMINATION tests (Retirement plans)
- Publication
Journal of Financial & Quantitative Analysis, 2006, Vol 41, Issue 4, p939
- ISSN
0022-1090
- Publication type
Article
- DOI
10.1017/S0022109000002702