Social Interaction in the Family: Evidence from Investors’ Security Holdings
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A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
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Date
2023-07-01
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Mcode
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Language
en
Pages
31
Series
Review of Finance, Volume 27, issue 4, pp. 1297-1327
Abstract
We show that investors tend to hold the same securities as their parents. This intergenerational correlation is stronger for mothers and family members who are more likely to communicate with each other. An instrumental variables estimation and a natural experiment suggest that the correlation reflects social influence. This influence runs not only from parents to children, but also vice versa. The resulting holdings of identical securities increase intergenerational correlations in portfolio choice, exacerbate wealth inequality, and amplify the consequences of behavioral biases.Description
Keywords
Social interaction, portfolio choice, wealth inequality, behavioral bias
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Citation
Knüpfer, S, Rantapuska, E & Sarvimäki, M 2023, ' Social Interaction in the Family: Evidence from Investors’ Security Holdings ', Review of Finance, vol. 27, no. 4, rfac060, pp. 1297-1327 . https://doi.org/10.1093/rof/rfac060