Participation Constraints in the Stock Market

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Participation Constraints in the Stock Market

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dc.contributor.author Andersen, Steffen
dc.contributor.author Meisner Nielsen, Kasper
dc.date.accessioned 2010-09-22
dc.date.accessioned 2010-09-22T09:22:47Z
dc.date.available 2010-09-22T09:22:47Z
dc.date.issued 2010-09-22
dc.identifier.uri http://hdl.handle.net/10398/8169
dc.description.abstract We use a natural experiment to investigate the impact of participation constraints on individuals' decisions to invest in the stock market. Unexpected inheritance due to sudden deaths results in exogenous variation in financial wealth and allows us to examine whether fixed entry and ongoing participation costs cause non-participation. We have three key findings. First, windfall wealth has a positive effect on participation. Second, the majority of households do not react to sizeable windfalls by entering the stock market, but hold on to substantial safe assets—even over longer horizons. Third, the majority of households inheriting stock holdings actively sell the entire portfolio. Overall, these findings suggest that participation by many individuals is unlikely to be constrained by financial participation costs. en_US
dc.format.extent 46 en_US
dc.language eng en_US
dc.relation.ispartofseries Working paper;3-2010
dc.title Participation Constraints in the Stock Market en_US
dc.type wp en_US
dc.accessionstatus modt10sep22 lbjl en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.corporationshort Department of Economics en_US
dc.contributor.department Økonomisk Institut en_US
dc.contributor.departmentshort ECON en_US
dc.contributor.departmentuk Department of Economics en_US
dc.contributor.departmentukshort ECON en_US
dc.idnumber x656600461 en_US
dc.publisher.city Frederiksberg en_US
dc.publisher.year 2010 en_US
dc.title.subtitle Evidence from Unexpected Inheritance due to Sudden Death en_US


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