Differences in Portfolios across Countries: Economic Environment versus Household Characteristics

Michael Haliassos, Dimitris Christelis and Dimitris Georgarakos

No 10204, MEA discussion paper series from Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy

Abstract: We document and study international differences in both ownership and holdings of stocks, private businesses, homes, and mortgages among households aged fifty or more in thirteen countries, using new and comparable survey data. We employ counterfactual techniques to decompose observed differences across the Atlantic, within the US, and within Europe into those arising from differences in population characteristics and differences in economic environments. We then correlate the latter differences to country-level indicators. Ownership across the range of the assets considered tends to be more widespread among US households. We document that shortly prior to the current crisis, US households tended to invest larger amounts in stocks and smaller ones in homes, and to have larger mortgages in older age, even controlling for characteristics. This is consistent with the high prevalence of negative equity associated with the current crisis. More generally, we find that differences in household characteristics often play a small role, while differences in economic environments tend to explain most of the observed differences in ownership rates and in amounts held. The latter differences are much more pronounced among European countries than among US regions, suggesting further potential for harmonization of policies and institutions.

JEL-codes: E21 G11 (search for similar items in EconPapers)
Date: 2010-09-08
New Economics Papers: this item is included in nep-eec and nep-eur
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Citations: View citations in EconPapers (22)

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Journal Article: Differences in Portfolios across Countries: Economic Environment versus Household Characteristics (2013)
Working Paper: Differences in Portfolios across Countries: Economic Environment versus Household Characteristics (2010)
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