Portfolio choice with indivisible and illiquid housing assets: the case of Spain

Mayordomo, Sergio; Rodríguez‐Moreno, María; Peña, Juan Ignacio

doi:10.1080/14697688.2013.843786

Cited by 3 publications

(3 citation statements)

References 36 publications

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“…Further, persistent borrowings from informal sources is also a serious concern that led researchers to focus on “debt” theme (Guérin et al , 2013). “Portfolio choice” started emerging during this period, as researchers started examining household decisions to invest in each asset class and their importance in household portfolio (Domínguez-Barrero and López-Laborda, 2012; Mayordomo et al , 2014). With growing interest in the field, “household balance sheets” became a niche theme.…”

Section: Thematic Evolutionmentioning

confidence: 99%

“…Heimer et al (2019) find that mortality risk causes young people to under-save and retirees to draw down their savings slowly. Mayordomo et al (2014) have compared the optimal portfolio of households, conditional on housing value, with their actual portfolio and investigated the factors responsible for the deviation between both portfolios. Their results show that Spanish households invest less in deposits, stocks and mortgages than in optimal investments.…”

Section: Cluster 5: Life Cycle Approach and Portfolio Choicementioning

confidence: 99%

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Household finance: a systematic literature review and directions for future research

Zehra

Singh²

2023

QRFM

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Purpose The objective of this systematic literature review (SLR) is to explore the current state of research in the field of household finance (HF). This study aims to summarize the existing research to highlight the importance of household finance in a nation’s economy. By exploring all conceptual and applied implications of HF, this study projects directions for future research to develop a comprehensive understanding of the subject. Design/methodology/approach This SLR is based on 112 articles published in peer-reviewed journals between 2006 and 2020 (Table 3). The methodology comprises five steps, namely, formulation of research questions, identification of studies, their selection and evaluation, analyses and syntheses and presentation of results. Findings The findings of this study show that studies on HF are gradually increasing worldwide with the USA registering the highest number of published research on the topic during the period under scrutiny. Notwithstanding the increasing attention and research on HF, empirical research in emerging economies is lagging. Additionally, this study finds that HF structure presents a perfect setting to understand how households compose their financial portfolio, make financial decisions and what factors influence their decisions. Research limitations/implications This study is an SLR – an accurate and accepted method of reviewing available literature on a selected subject. However, the selection of inclusion and exclusion criteria depends on the researchers’ rationale which might lead to research bias. This should be considered an inherent limitation of SLR. Practical implications By synthesizing the contents of extant literature, this study presents important insights into HF. This study underlines the most discussed topics in the domain and identifies potential investigation areas. This study gives the knowledge of leading articles, authors and journals and informs scholars and academicians about the areas that need further investigation by portraying the complete picture of the subject in a systematic manner. Further, this study highlights that households make suboptimal financial decisions that affect their financial well-being. To reduce the adverse impacts of these decisions, policymakers and financial institutions must take steps to improve households’ use of formal financial markets. Household decisions can be reformed by enhancing consumers’ knowledge about financial products and services. Furthermore, households can be served better by offering customization in traditional financial products. Originality/value This study synthesizes the main findings of selected literature on HF. The expansion of studies on HF has generated the need to review the existing literature in a systematic manner. To the researchers’ best knowledge, this SLR is the first thorough study of available articles in the HF domain. This study presents the scope of future research by highlighting numerous aspects and functions of HF.

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Section: Thematic Evolutionmentioning

confidence: 99%

Section: Cluster 5: Life Cycle Approach and Portfolio Choicementioning

confidence: 99%

Household finance: a systematic literature review and directions for future research

Zehra

Singh²

2023

QRFM

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“…Despite the long-standing theoretical appeal of rational agents and the efficient market hypothesis, not all households enter the risky asset markets as the classical portfolio theory expects (Campbell, 2006). Researchers have demonstrated that background risk (Benzoni and Chyruk, 2009;Bonaparte et al, 2014), demographic characteristics (Guiso et al, 2002;Cardak and Wilkins, 2009), social interaction (Hong et al, 2004;Brown et al, 2008) and credit constrains (Mayordomo et al, 2014) can explain the stock market limited participation puzzle. The institutional environment plays a vital role in individuals' financial behavior.…”

Section: Introductionmentioning

confidence: 99%

Is household registration system responsible for the limited participation of stock market in China?

Liu

Zhang

2020

RBF

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PurposeThis paper aims to examine the effect of China’s unique household registration system (hukou) on stock market participation.Design/methodology/approachIn an effort to estimate the effect of hukou on households' financial behavior, we draw on data from China Family Panel Studies (CFPS) and use probit model and tobit model to test the effect of hukou on households stock market participation.FindingsThe results are with strong interpretative power over the limited participation of stock market in China-investors living in urban areas with urban hukou are more likely to participate in stock markets and allocate a larger fraction of financial assets to stocks and remarkably robust to a battery of robustness checks. The dual structure of social security caused by the household registration system could explain this result. Furthermore, marriage plays such a role of integrating social resources attached to hukou that only the marriage of individuals with urban hukou could significantly promote households' participation in the stock market. For married families, a household in which both husband and wife have urban hukou has a greater possibility to invest in stocks relative to those with rural hukou.Originality/valueThis paper contributes to the literature in two ways. First, much literature focuses on the stock market limited participation puzzle and gives explanations from the perspectives of individual heterogeneity and financial markets. This paper examines the effect of hukou. Such an idea is instructive to some developing countries where residents are treated differently because of the institutional reason. Second, the effects we find are economically meaningful. Our estimates indicate that medical insurance attached to hukou can explain almost 58% of the impact of hukou, which suggests that the key to reforming China's current household registration system is to make welfare separate from hukou. Moreover, homogamy based on hukou widens the gap of households' risky assets, which provides a new view to understand the income gap in the cities of China and the heterogeneous effect of marriage on stock market participation.

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Effects of the financial crisis on household financial risky assets holdings: Empirical evidence from Europe

Li²,

Liu

2021

International Review of Economics & Finance

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Portfolio choice with indivisible and illiquid housing assets: the case of Spain

Cited by 3 publications

References 36 publications

Household finance: a systematic literature review and directions for future research

Household finance: a systematic literature review and directions for future research

Is household registration system responsible for the limited participation of stock market in China?

Effects of the financial crisis on household financial risky assets holdings: Empirical evidence from Europe

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