Owner-Occupied Housing and Demand for Risky Financial Assets: Some Finnish Evidence
Tuukka Saarimaa ()
Finnish Economic Papers, 2008, vol. 21, issue 1, 22-38
This paper studies the linkage between owner-occupied housing and portfolio choice. Using a theoretical simulation model with Finnish asset return data we find that a leveraged position in housing has a clear negative effect on the share of stocks in a mean-variance efficient portfolio. The second part of the paper studies how owner-occupied housing actually affects households’ financial portfolios using Finnish household data. The main result indicates that the more valuable house a homeowner resides in, at a given level of net wealth, the less likely it is to own stocks. However, it seems that housing has only a small effect if any on the share of financial assets a household invests in stocks conditional on stockholding.
JEL-codes: D14 D91 G11 R21 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:fep:journl:v:21:y:2008:i:1:p:22-38
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