Proud to Not Own Stocks: How Identity Shapes Financial Decisions

Luca Henkel () and Christian Zimpelmann

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: 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.

Keywords: Identity; Perceptions; Stock Market Participation; Financial Decision-Making (search for similar items in EconPapers)
JEL-codes: D14 D83 G41 G51 (search for similar items in EconPapers)
Pages: 99
Date: 2023-06
New Economics Papers: this item is included in nep-hme
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.crctr224.de/research/discussion-papers/archive/dp380 (application/pdf)

Related works:
Working Paper: Proud to Not Own Stocks: How Identity Shapes Financial Decisions (2023)
Working Paper: Proud to Not Own Stocks: How Identity Shapes Financial Decisions (2022)
Working Paper: Proud to Not Own Stocks: How Identity Shapes Financial Decisions (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2022_380v2

Access Statistics for this paper

More papers in CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany Kaiserstr. 1, 53113 Bonn , Germany.
Bibliographic data for series maintained by CRC Office ().