We examine whether the decision to participate in the stock market and other related portfolio decisions are influenced by income hedging motives. Economic theory predicts that the market participation propensity should increase as the correlation between income growth and stock market returns...

We develop a parsimonious econometrics methodology to estimate individual's portfolio return process accounting for self-selection bias from portfolio adjustment; our approach is useful to assist investors learning own return process profile. We study three components to characterize investor's...

This paper demonstrates a strong inverse connection between daily stock returns and Congress in session. Our key conjecture is when Congress is in session, more media attention focuses on congressional activity than on the stock market; the more the news attention is political, the lower the...

This paper examines whether politically active individuals are more likely to participate in the stock market. Our key conjecture is that politically involved individuals follow political news more actively, which increases their chances of being exposed to financial news. Consequently, their...

We introduce new financial calendar anomalies on post holidays as well as best and worst day of the year. We find that the excess return in the stock market abnormal returns post major holidays: Thanksgiving (Black Friday), Christmas and New Year. Furthermore, we analyze the best and worst day...

We show that stock prices underreact when there is a political event, reflected in higher momentum returns. We conjecture that political news crowds out stock news cause investors to distract, trade more indexes and underreact to firm specific news. We analyze momentum returns following general...

This paper estimates the Elasticity of Intertemporal Substitution (EIS) using household actual return. The approach is motivated by numerous data sources indicate that the median US stockholder has a portfolio contains three to four individual stocks, rather than a diverse bundle. Thus,...

Studies of household stock market participation report low participation rates. The explanations cited are that the fixed costs associated with participation and high risk aversion discourage households from buying stocks. However, the low participation rate findings are unchallenged. We argue...

An analysis of the Survey of Consumer Finance shows that wealthy investors have a higher return on their stocks than their poorer counterparts. Three key empirical facts emerge: (i) wealthy investors employ more productive search efforts, (ii) financial risk bearing and search efforts are...

We show that the stock market pricing the presidential margin of victory in a nonlinear concave fashion, with a higher price for medium than slight or crushing victories. We conjecture that the margin of victory reflects president confidence and the ability to execute policies. A small margin...