Subjective Return Expectations, Information and Stock Market Participation : Evidence from France
Tas, Derya; Calvo Pardo, Hector; Arrondel, Luc (2012-04), Subjective Return Expectations, Information and Stock Market Participation : Evidence from France. https://basepub.dauphine.fr/handle/123456789/9805
TypeDocument de travail / Working paper
Series titleCahiers de la Chaire les Particuliers Face aux Risques
MetadataShow full item record
Abstract (EN)Despite of its importance for the economy, stock ownership by households is poorly under- stood. Recent research has uncovered that expectations of stock market returns by individuals strongly correlate with stock ownership. This paper reports new Öndings from a survey that collected data on stock market return expectations, individual information sets and stock ownership, for a representative sample by age and wealth (íMode de vie des FranÁaisí, TNS 2007). Individual information sets measure in probabilistic terms the beliefs that individuals hold about equity returns over the last Öve years. We Önd that (i) expected returns and information sets are very heterogeneous, hump-shaped in age, higher for males and increasing in wealth; (ii) stock ownership increases with the subjective conditional expectation of a positive return; and (iii) that information is costly acquired, sourced from social interactions, professionals, specialised media access, or own past experience, and is consistent with rational inattentiveness amongst optimists and income constrained respondents.
Subjects / KeywordsSubjective Expectations; Information; Stock Market Participation; Household Finance
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