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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 …
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Exploiting a representative sample of the French population by age, wealth, and asset classes, we document novel facts about their expectations and perceptions of stock market returns. Both expectations and perceptions of returns are very dispersed, significantly lower than their data...
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explainable by household characteristics as well as differences in risk aversion and a remainder. We employ the unexplained part …
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