One important parameter in the decision process when buying a private annuity is individuals´ subjective life expectancy, because it directly influences the expected rate of return. We examine the market for private annuities in Germany and evaluate potential selection effects based on...

It is known that investors over-invest in "home" assets. Yet, there is much debate on whether superior information or sentiment drives this behavior. Using the sports-betting market as a real-market laboratory, we find individuals exhibit a bias toward home-team wagers, which does not yield...

The recent economic crisis still lingering in Europe has deeply affected the way individuals look at the investment market. Understanding the trust processes underlying the decision to invest with financial intermediaries is of particular importance both at managerial (product development and...

Using longitudinal data from PSID, we show the positive relation between labor income and the equity share of financial wealth is stronger for those who have a higher persistence in shocks to permanent labor income. The results support the hypothesis that the cross sectional variation in...

This paper develops and estimates a dynamic model of stock market participation, where consumers' decisions regarding stock market participation are influenced by participation costs. The practical significance of the participation costs is considered as being a channel through which financial...

We use an incentivized survey experiment to test how visualizing key information of mutual funds helps investors to follow the minimum-cost investment strategy. Respondents can invest in three ETFs tracking the same index and we find that adding a net expected return graph reduces the amount of...

We study the effects of central bank communication about financial stability on individuals' expectations and risk-taking. Using a randomized information experiment, we show that communication causally affects individuals' beliefs and investment behavior, consistent with an expectations channel...

We study the effects of central bank communication about financial stability on individuals’ expectations and risk-taking. Using a randomized information experiment, we show that communication causally affects individuals’ beliefs and investment behavior, consistent with an expectations...

This chapter is concerned with the distribution of personal wealth, which usually refers to the material assets that can be sold in the marketpace, although on occasion pension rights are also included. We summarise the available evidence on wealth distribution for a number of countries. This...

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...