Cognitive Abilities and Portfolio Choice

Dimitris Christelis, Tullio Jappelli () and Mario Padula

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We study the relation between cognitive ability and the decision to invest in stocks using the recent Survey of Health, Ageing and Retirement in Europe (SHARE). The survey 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 investment accounts. We also find that stockholding increases with social interactions, intention to leave a bequest, and is negatively associated with health status.

Date: 2006-05-01
New Economics Papers: this item is included in nep-eec, nep-fin and nep-fmk
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Citations: View citations in EconPapers (51)

Published in European Economic Review, 2010, Vol. 54, 1, Pages 18–38.

Downloads: (external link)
http://www.csef.it/WP/wp157.pdf (application/pdf)

Related works:
Journal Article: Cognitive abilities and portfolio choice (2010)
Working Paper: Cognitive Abilities and Portfolio Choice (2008)
Working Paper: Cognitive abilities and portfolio choice (2008)
Working Paper: Cognitive Abilities and Portfolio Choice (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:157

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