We investigate the determinants of a household's decision on whether to invest in risky financial assets. Financial … theory suggests that with increasing labor income risk, the reluctance of households to hold stocks increases. We propose to … measure income risk as the observed variation of household income over a five year period. We find that indeed higher income …

explainable by household characteristics as well as differences in risk aversion and a remainder. We employ the unexplained part …

Does economic policy uncertainty affect household stockholding? To answer this question we create a novel measure of … household exposure to economic policy uncertainty news by combining survey information on the hours a household spends in … reading newspapers and the frequency of such news in the popular press during a household's pre-interview period. After …

We show that household heads with a strong internal economic locus of control are more likely to hold equity and hold a …

factors that affect the willingness to take financial risks. Our empirical evidence contradicts standard portfolio theory, as …

We show how to use panel data on household consumption to directly estimate households’ risk preferences. Specifically … preferences. Full insurance cannot be rejected. As the risk-sharing as-if-complete-markets theory might predict, estimated risk … preferences are unrelated to wealth or other characteristics. The heterogeneity matters for policy: Although the average household …