Market Participation and Dividend Clienteles

Marco Rossi ()
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Marco Rossi: Department of Finance, Mays Business School, Texas A&M University, USA

Quarterly Journal of Finance (QJF), 2014, vol. 04, issue 04, 1-21

Abstract: Asset allocation and market participation are intimately related investment decisions. Studies of dividend clienteles often attribute the positive relation between age and dividends to lack of self-control, but consumers with self-control problems are precisely those less likely to hold securities. Using data from the Consumer Expenditure Survey (CEX), I model market participation and dividend preferences jointly and find evidence of self-selection bias in traditional regressions linking dividend preferences to investors' demographics. The positive relation between dividends and age is likely due to life-cycle considerations rather than to lack of self-control.

Keywords: Market participation; dividend clienteles; self-control; CEX (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1142/S2010139214500128

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