Formative Experiences and Portfolio Choice: Evidence from the Finnish Great Depression

• 成果类型: Article
• 署名作者: Knupfer, Samuli; Rantapuska, Elias; Sarvimaki, Matti
• 署名单位: BI Norwegian Business School; Centre for Economic Policy Research - UK; Aalto University; VATT Institute for Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12469
• 发表日期: 2017
• 页码: 133-166
• 关键词: Risk preferences; earnings losses; consumption; investors; HEALTH; iq

摘要

We trace the impact of formative experiences on portfolio choice. Plausibly exogenous variation in workers' exposure to a depression allows us to identify the effects and a new estimation approach makes addressing wealth and income effects possible. We find that adversely affected workers are less likely to invest in risky assets. This result is robust to a number of control variables and it holds for individuals whose income, employment, and wealth were unaffected. The effects travel through social networks: individuals whose neighbors and family members experienced adverse circumstances also avoid risky investments.