The influence of non-cognitive and cognitive ability on individuals' stock market participation
2013 (English)Report (Other academic)
Stock market participation is found to be positively related to cognitive, as well as non-cognitive ability, controlling for wealth, income, age, and other demographic and socioeconomic factors. Interestingly, the effects are of economic significant magnitudes, e.g. participation is on average 11.49% larger among those with high compared with low cognitive and non-cognitive abilities, and holds also when controlling for individuals risk preferences. The later indicates that cognitive and non-cognitive abilities have a role in affecting financial decisions also through non-preference driven effects. Limitations in non-cognitive ability do further explain non-participation among affluent individuals.
Place, publisher, year, edition, pages
Umeå, 2013. , 43 p.
Umeå economic studies, ISSN 0348-1018 ; 866
household finance, investor behavior, stock market participation, psychological traits, intelligence, risk preferences
Economics Business Administration
Research subject Business Studies; Economics
IdentifiersURN: urn:nbn:se:umu:diva-81748OAI: oai:DiVA.org:umu-81748DiVA: diva2:658279