How Extended Family Mental Health Issues Influence Household Portfolio Allocations

Jermaine Toney and Vicki L. Bogan
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Vicki L. Bogan: Cornell University

Review of Economics of the Household, 2024, vol. 22, issue 2, No 10, 633-708

Abstract: Abstract Growing research links household financial decisions to physical and mental health status within the nuclear family. We hypothesize that mental health issues (psychological distress) outside of the nuclear family unit are a unique contributor to household portfolio allocation decisions. We use panel data and find that having at least one sibling with psychological distress decreases the probability of risky asset ownership (stocks, mutual funds), decreases risky assets as a share of financial assets, and decreases total amount of risky asset holding. These results have important policy-related implications for understanding the connection between health, portfolio allocation, and wealth building.

Keywords: Household finance; Portfolio allocation; Mental health (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11150-023-09666-6

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