The Spirit of Capitalism and Asset Pricing: an Empirical Investigation

Qiang Zhang ()

No CIRJE-F-428, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: We extend and test two models of aggregate asset pricing that feature status-seeking through accumulation of not only financial assets but also human capital. We use weak-identification robust tests to confront these models with U.S. data. Contrary to previous results, we find that the spirit of capitalism hypothesis, modeled as either direct preference for wealth or pursuit of relative wealth status, is rejected in the aggregate data. Therefore, adding status motive alone to an otherwise standard model may not be sufficient to resolve the equity premium puzzle.

Pages: 34pages
Date: 2006-06
New Economics Papers: this item is included in nep-fmk
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Citations: View citations in EconPapers (6)

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Journal Article: The Spirit of Capitalism and Asset Pricing: An Empirical Investigation (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2006cf428

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