Cognitive Abilities and Portfolio Choice

Tullio Jappelli () and Mario Padula
Authors registered in the RePEc Author Service: Dimitris Christelis

No 5735, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the relation between cognitive ability and the decision to invest in stocks using the recent Survey of Health, Ageing and Retirement in Europe (SHARE). The survey has detailed data on wealth and portfolio composition of individuals aged 50+ in 11 European countries and three indicators of cognitive abilities: mathematical, verbal fluency, and recall skills. We find that the propensity to invest in stocks is strongly associated with cognitive abilities, for both direct stock market participation and indirect participation through mutual funds and investment accounts. We also find that stockholding increases with social interactions, intention to leave a bequest, and is negatively associated with health status.

Keywords: Cognitive abilities; Stockholding; Portfolio choice (search for similar items in EconPapers)
JEL-codes: D8 E2 G1 (search for similar items in EconPapers)
Date: 2006-07
New Economics Papers: this item is included in nep-fin
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (46)

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Related works:
Journal Article: Cognitive abilities and portfolio choice (2010)
Working Paper: Cognitive Abilities and Portfolio Choice (2008)
Working Paper: Cognitive abilities and portfolio choice (2008)
Working Paper: Cognitive Abilities and Portfolio Choice (2006)
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