This paper provides direct evidence of a causal link between the stock market participation of individuals and that of the other members of the community in which they reside. We first establish the presence of a robust positive correlation between the probability that an individual owns stock...

This paper is the first to investigate the importance of geography in explaining equity market participation. We provide evidence to support two distinct local area effects. The first is a community ownership effect, that is, individuals are influenced by the investment behavior of members of...

This paper establishes a causal relation between an individual's decision of whether to own stocks and average stock market participation decision of the individual's community. We instrument for the average ownership of an individual's community with lagged average ownership of the states in...

This paper establishes a causal relation between an individual's decision of whether to own stocks and average stock market participation decision of the individual's community. We instrument for the average ownership of an individual's community with lagged average ownership of the states in...

This paper is the first to investigate the importance of geography in explaining equity market participation. We provide evidence to support two distinct local area effects. The first is a community ownership effect, that is, individuals are influenced by the investment behavior of members of...

This paper shows that individual investors are reluctant to sell mutual funds that have appreciated in value and are willing to sell losers, in stark contrast to their stock trading where the disposition effect dominates. Comparison of trades in taxable and tax-deferred accounts suggests that a...

This paper tests whether information advantages help explain why some individual investors concentrate their stock portfolios in a few stocks. Stock investments made by households that choose to concentrate their brokerage accounts in a few stocks outperform those made by households with more...

Using a data set on a large number of retail investors from 1991-96, we find that households exhibit a strong preference for local investment - the average household invests nearly a third of their portfolio in firms headquartered within 250 miles. We test whether this locality bias is driven by...