that they can allocate to their own choice. Moreover, unless liquidfinancial wealth is too small, each household should … hold the maximum amount to which the tax incentives apply.In this paper, we analyze household data on participation in …

We investigate the determinants of a household's decision on whether to invest in risky financial assets. Financial … measure income risk as the observed variation of household income over a five year period. We find that indeed higher income … risk reduces the propensity to invest in stocks. However, when controlling for household heterogeneity as well as …