Why do individuals not participate in the stock market?

Yulia Merkoulova and Chris Veld

International Review of Financial Analysis, 2022, vol. 83, issue C

Abstract: We use a representative survey to study economic and non-economic factors that affect stock market participation. We find that many individuals suffer from inertia in the sense that they do not want to take the time and effort to invest in stocks. Inertia also explains stock market participation in addition to earlier documented factors such as actual and perceived financial literacy, trust, and the personal equity risk premium (PERP). A high percentage of non-investors (66%) assert that they will never invest in stocks. We find that inertia affects this assertion both directly and indirectly through factors such as age and gender.

Keywords: Stock market participation; Equity risk premium; Financial literacy; Household finance; Investor inertia (search for similar items in EconPapers)
JEL-codes: D14 G11 G41 G51 G53 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:83:y:2022:i:c:s1057521922002484

DOI: 10.1016/j.irfa.2022.102292

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