How Couples Approach Portfolio Allocation

Helen Fessenden, Nika Lazaryan and Urvi Neelakantan

Richmond Fed Economic Brief, 2017, issue February

Abstract: The classical theory of household portfolio allocation finds that the share of household wealth invested in risky assets is independent of the level of household wealth. However, this prediction is at odds with empirical observations. This Economic Brief presents findings that reconcile the two. A model in which a household's portfolio allocation reflects the preferences of both spouses, adjusted for the bargaining power of each spouse, predicts that the wealthier a household becomes, the greater the share of its wealth will be invested in risky assets.

Keywords: portfolio allocation; households (search for similar items in EconPapers)
Date: 2017
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