Wealth Stratification and Portfolio Choice

Karl Boulware and Kenneth N. Kuttner

AEA Papers and Proceedings, 2020, vol. 110, 411-15

Abstract: This paper investigates the past decade's increase in wealth inequality along racial and ethnic lines. Using a new measure of wealth stratification based on data from the Survey of Consumer Finances, we find that stratification increased significantly for blacks from 2007 to 2016; Hispanics exhibited a similar but less pronounced trend. Our regression analysis shows that relative to whites, blacks and Hispanics tend to invest more in houses and less in stocks, controlling for observable demographic factors. Consequently, these groups did not benefit as much as whites from the decade's spectacular increase in stock prices.

JEL-codes: D31 G11 G12 G51 J15 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1257/pandp.20201111

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