Stock Market Participation and the Internet

Vicki Bogan

No 127044, Working Papers from Cornell University, Department of Applied Economics and Management

Abstract: Theory indicates that frictions (e.g., information and transaction costs) could account for the lower than expected stock market participation rates. This paper examines the hypothesis that there has been a fundamental change in participation and links this change to the reduction of these frictions by the advent of the Internet. Using panel data on household participation rates over the past decade, the results show computer/Internet using households raised participation substantially more than non-computer using households. The increased probability of participation was equivalent to having over $27,000 in additional household income or over 2.5 more mean years of education.

Keywords: Public; Economics (search for similar items in EconPapers)
Pages: 31
Date: 2006
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:cudawp:127044

DOI: 10.22004/ag.econ.127044

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