The determinants of household risky asset holdings: Australian evidence on background risk and other factors

By Buly A. Cardak, R. Wilkins. 2009

271 citations recorded by the source corpus.

We study the portfolio allocation decisions of Australian households using the relatively new Household, Income and Labour Dynamics in Australia (HILDA) Survey. We focus on household allocations to risky financial assets. Our empirical analysis considers a range of hypothesised determinants of these allocations. We find background risk factors posed by labor income uncertainty and health risk are important. Credit constraints and observed risk preferences play the expected role. A positive age gradient is identified for risky asset holdings and home-ownership is associated with greater risky asset holdings. A unifying theme for many of our empirical findings is the important role played by financial awareness and knowledge in determining risky asset holdings. Many non-stockholding households appear to lack the experience and financial literacy that might enable them to benefit from direct investment in stocks.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/c1b5df7e1747e7a405dbc6c8c97dc9d3371a4805

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Citations in the corpus

Stock Market Literacy, Trust, and Participation (2015, unknown): “…(Malmendier and Nagel, 2011), educational attainment and (cid:133)nancial sophistication (Christelis et al., 2011), (cid:133)nancial literacy (Cardak and Wilkins, 2009; Van Rooij et al., 2011), cognitive ability (Benjamin et al., 2013), and sociability (Hong et al., 2004; B(cid:246)nte and…”
Household Financial Decision Making Amidst the COVID-19 Pandemic (2020, background): “…2004), marital status (e.g., Atella, Brunetti, and Maestas 2012), health status (e.g., Atella, Brunetti, and Maestas 2012; Berkowitz and Qiu 2006; Cardak and Wilkins 2009; Rosen and Wu 2004) government employment status (e.g., Gao, Liu, and Shi 2020), children (e.g., Cardak and Wilkins 2009;…”
Financial Literacy and Participation in the Derivatives Markets (2018, unknown): “…(1994), Haliassos and Bertaut (1995), Bertaut and Starr (20 0 0), Attanasio et al. (2002), Brav et al. (2002), Guiso et al. (2003), Vissing-Jorgensen (2003), Guiso and Jappelli (2005), Guiso et al. (2008), Cardak and Wilkins (2009) and Bricker et al. (2011) . speed of information transmission.”
Financial Literacy, Portfolio Choice and Financial Well-Being (2016, background): “Age and home ownership are also related background risk factors and thus influence participation (Cardak and Wilkins 2009).”
Marriage and Other Risky Assets: A Portfolio Approach (2011, background): “In line with Cardak and Wilkins (2009), we focus on more specific institutional characteristics of the labor market and we also investigate the potential impact of other individual factors attaining the household head’s labor market position.”