Dynamic Stock Market Participation of Households

摘要: This paper develops and estimates a dynamic model of stock market participation, where consumers’ decisions regarding participation are influenced by costs. The practical significance the costs is considered as being channel through which financial education programs can affect investment decisions. Using household data from Panel Study Income Dynamics, I estimate magnitude cost, allowing for individual heterogeneity in it. results show average articipation cost about 5% labor income; however, it varies substantially over life. successfully predicts level observed rate increasing pattern life cycle.