Demographic Factors Affecting U.S. Households’ Investment in Stocks

Abstract

Using survey data of U.S. households, we examine the demographic factors associated with stock market participation to seek to explain why some households invest in stocks while others do not. We primarily utilize Probit model estimation robust to heteroskedasticity to evaluate multiple demographic variables that could potentially explain direct stock ownership. Additional tests examine the demographic factors associated with the amounts of direct stock ownership and indirect stock ownership through mutual funds, retirement accounts or other avenues. Our results identify various demographic factors that most likely affect U.S. households' investment in stocks, including age, gender, education level, income, homeownership and business ownership. These results are robust to multiple model variations. These findings may be of interest to financial scholars and policymakers as they seek to better understand stock market participation.

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“…Это в пять раз больше, чем все товары и услуги, произведенные в экономике США за один год. Почти три четверти совокупных активов домашних хозяйств -это именные акции, пенсионные счета, вложения в венчурные предприятия (Guragai1, Peabody, 2018). Недвижимость составляет большую часть нефинансовых активов, как и в России.…”