Household Portfolio Choice, Reference Dependence, and the Marriage Market

Wenchao Li (), Changcheng Song (), Shu Xu () and Junjian Yi
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Wenchao Li: National University of Singapore
Changcheng Song: National University of Singapore
Shu Xu: Southwestern University of Finance and Economics

No 10528, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper bridges the financial market and the marriage market using a reference-dependent mechanism. Male-biased sex ratios induce families with sons to hold more risky assets, since competitive marital payment in a tight market raises the reference level of marriage expenditure for such families. Using the 2013 China Household Finance Survey data, we find that a 0.1 increase in the sex ratio raises the probability of participating in the stock market by 25.7 percent, or the stock share of liquid wealth by 42.7 percent for families with a son; there appears no effect for families with a daughter.

Keywords: prospect theory; sex-ratio imbalance; difference-in-differences estimate; reference dependence; household portfolio choice (search for similar items in EconPapers)
JEL-codes: D03 G02 G11 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2017-01
New Economics Papers: this item is included in nep-cna, nep-sea and nep-tra
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Published - published as 'High Sex Ratios and Household Portfolio Choice in China' in: Journal of Human Resources, 2022, 57 (2), 465-490

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