Scandinavian Working Papers in Economics
Umeå Economic Studies,
Umeå University, Department of Economics
No 865: Loved Ones Matter: Family Effects and Stock Market Participation
Jörgen Hellström (), Emma Zetterdahl () and Niklas Hanes ()
Additional contact information
Jörgen Hellström: Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
Emma Zetterdahl: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
Niklas Hanes: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
Abstract: In this paper new and detailed empirical evidence on the impact of family on individuals’ stock market participation decision is provided. Since influence is likely to vary systematically over different types of individuals the heterogeneous effect of social interaction, in a setting including both community as well as within-family effects, is further examined. The main results indicate that individuals’ likelihood for subsequent participation increases (decreases) following positive (negative) parental and partner stock market experiences. The effect of social interaction is further found to be of relatively greater importance for individuals with relatively lower levels of financial literacy and for individuals with an on average higher level of interpersonal trust. In terms of gender, both male and female participation is positively affected by family influence, while community effects mainly pertain to males.
Keywords: Family effects; Investor behavior; Peer effect; Social interaction; Social influence; Stock market participation
39 pages, September 19, 2013
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