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Does local culture trigger speculative investment behavior?

Suin Lee, Christos Pantzalis and Jung Chul Park

Journal of Business Research, 2019, vol. 103, issue C, 71-88

Abstract: The average investor who lives in a state with relatively higher alcohol consumption is more likely to buy and sell lottery-type stocks and to trade more often. Both of these activities entail sensation seeking; correspondingly, we find that speculative investment behavior is correlated with alcohol consumption only in states with lotteries and where a local tendency for sensation seeking behavior has not been diluted by an influx of migrants from other states where alcohol consumption is low. Most importantly, our results suggest that alcohol consumption does not per se drive a preference for investment gambles, but rather portrays the type of local culture in which the speculative investing occurs.

Keywords: Local culture; Alcohol consumption; Gambling; Lottery-type stocks; Turnover (search for similar items in EconPapers)
JEL-codes: G02 G11 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:jbrese:v:103:y:2019:i:c:p:71-88