Traditional finance explains individual investors' behavior and financial decision-making based on economic incentives and rationality. Modern finance, however, takes a holistic view and searches for not only economic but also biological, psychological, and social factors that shape...

This paper employs subjective stock market expectation responses from Health and Retirement Survey as a proxy for stock market optimism of American households. I first ask if individuals are inert in terms of forming their optimistic stock market views. Second I analyze the impact of optimism on...

We decompose total disagreement about macro variables into the disagreement among optimists (i.e., forecasters whose forecast exceeds a certain threshold) and pessimists. Optimistic (pessimistic) forecasters tend to disagree more in good (bad) times. Pessimistic (optimistic) disagreement...

We find that several factors explain an individual investor's style, i.e., the value versus growth orientation of the investor's stock portfolio. First, we find that an investor's style has a biological basis and is partially ingrained in an investor from birth. Second, we show that an...

This essay explores various components of a measure of pretax U.S. family income after adjusting for the size of the family in the U.S. in 1975 and 2000. Using data from the Panel Study on Income Dynamics, an important stylized fact is revealed: The rising inequality of property incomes,...

Using detailed data of individual investors, this study shows that, on average, individuals invest more in firms with clear and concise financial disclosures. The results indicate this relation is less pronounced for high frequency trading and financially-literate individuals. The study also...

Using a theoretical model where financial advising is done by banks, we show one additional explanation for the stockholding puzzle. Thus, we hypothesize that in countries with high level of relationship banking more households invest in riskfree assets

This paper examines the private unobserved migration propensity of married individuals using bounds to circumvent the issue of partial observability. Applied to the population of Danish couples aged between 25 to 39, this approach leads to two main results. First, we find convincing evidence...

We study the cross-section of stock returns with observed short interest and long positions of hedge funds. During the period 1997-2014, 30% of highly shorted stocks also have the highest level of hedge fund holdings. Stocks with both high short interest and high hedge fund holdings do not earn...

Households are dynamic while most surveys only collect information on individuals who are present at a single point in time. We exploit a unique and thorough household membership enumeration in Burkina Faso to consider the analytical costs of the typical static household roster. We document that...