Trading for Status

• 成果类型: Article
• 署名作者: Hong, Harrison; Jiang, Wenxi; Wang, Na; Zhao, Bin
• 署名单位: Princeton University; Yale University; Hofstra University; Shanghai Jiao Tong University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhu048
• 发表日期: 2014
• 页码: 3171
• 关键词: market participation; STOCK; RISK; diversification; investors; happiness; earnings; BEHAVIOR; income; news

摘要

We show that Keeping-Up-with-the-Joneses preferences can explain several puzzling retail investor behaviors, including the excessive trading of small local stocks. Status concerns lead households, especially those living in affluent areas, to demand these stocks to track their neighbors' wealth. This demand varies procyclically with the stock market's value and generates household trading. Using Chinese data on local stock turnover, stock message boards, and brokerage account trading, we test and confirm this hypothesis by exploiting the uneven rise of affluence across Chinese cities between 1998 and 2012.