Verlag:
IZA - Institute of Labor Economics, Bonn, Germany
This paper introduces a key factor influencing households' decision to invest in the stock market: how people view stockholders. Using surveys we conducted with nearly 8,500 individuals from eleven countries, we document that a large majority of...
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ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
Signatur:
DS 4
Fernleihe:
keine Fernleihe
This paper introduces a key factor influencing households' decision to invest in the stock market: how people view stockholders. Using surveys we conducted with nearly 8,500 individuals from eleven countries, we document that a large majority of respondents view stockholders negatively - they are perceived as greedy, gambler-like, and selfish individuals. We then provide experimental evidence that such perceptions of identity-relevant characteristics causally influence decision-making: if people view stockholders more negatively, they are less likely to choose stock-related investments. Furthermore, by linking survey and administrative data, we show that negative perceptions strongly predict households' stock market participation, more so than leading alternative determinants. Our findings provide a novel explanation for the puzzlingly low stock market participation rates around the world, new perspectives on the malleability of financial decision-making, and evidence for the importance of identity in economic decision-making.
