Rich Pickings? Risk, Return, and Skill in the Portfolios of the Wealthy

Laurent Calvet, Laurent Bach and Paolo Sodini

No 1126, HEC Research Papers Series from HEC Paris

Abstract: This paper empirically investigates the portfolios of wealthy households and their implications for the dynamics of inequality. Using an administrative panel of all Swedish residents, we document that returns on financial wealth are on average 4% higher per year for households in the top 1% compared to the median household. These high average returns are primarily compensations for high levels of systematic risk. Abnormal risk-adjusted returns, linked for instance to informational advantages or exceptional investment skill, contribute only marginally to the high returns of the wealthy. Implications for inequality dynamics and public policy are discussed.

Keywords: Household finance; inequality; risk-taking (search for similar items in EconPapers)
JEL-codes: D12 D31 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2015-12-20
New Economics Papers: this item is included in nep-net
References: Add references at CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2706207 (application/pdf)

Related works:
Working Paper: Rich Pickings? Risk, Return, and Skill in the Portfolios of the Wealthy (2016)
Working Paper: Rich Pickings? Risk, Return, and Skill in the Portfolios of the Wealthy (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1126

Access Statistics for this paper

More papers in HEC Research Papers Series from HEC Paris HEC Paris, 78351 Jouy-en-Josas cedex, France. Contact information at EDIRC.
Bibliographic data for series maintained by Antoine Haldemann ().