How Does Learning and Education Help to Overcome the Disposition Effect?

Tarvo Vaarmets, Kristjan Liivamägi and Tõnn Talpsepp

Review of Finance, 2019, vol. 23, issue 4, 801-830

Abstract: The paper assesses how intelligence, education, and learning affect the disposition effect using our exhaustive NASDAQ OMX Tallinn dataset. We employ survival analysis to show that higher intelligence and stronger learning abilities as measured by education level and the type of education lessen the disposition effect. More highly educated and intelligent investors also learn faster by trading. We find that mathematical abilities are beneficial for overcoming the disposition effect and propose that learning ability is one of the most important components of intelligence in affecting the disposition effect.

Keywords: Disposition effect; Learning; Education; Intelligence; Mental abilities (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (10)

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