Windfall gains and stock market participation
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In this paper, the authors exploit the randomized assignment of lottery prizes in a large administrative Swedish data set to estimate the causal effect of wealth on stock market participation, finding that a $150,000 windfall gain increases the stock market participant probability by 12 percentage points among non-participants but has no discernible effect on pre-lottery stock owners.About:
This article is published in Journal of Financial Economics.The article was published on 2021-01-01 and is currently open access. It has received 26 citations till now. The article focuses on the topics: Restricted stock & Stock market.read more
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Asset Market Participation and Portfolio Choice over the Life-Cycle
TL;DR: In this article, a double adjustment as households age is documented: a rebalancing of the portfolio composition away from stocks as they approach retirement and stock market exit after retirement, and a yearly probability of a large stock market loss in line with the frequency of stock market crashes in Norway.
Journal ArticleDOI
Long-run Effects of Lottery Wealth on Psychological Well-being
TL;DR: In this paper, the authors surveyed a large sample of Swedish lottery players about their psychological well-being 5-22 years after a major lottery event and analyzed the data following pre-registered procedures.
Journal ArticleDOI
Health responses to a wealth shock: evidence from a Swedish tax reform
Oscar Erixson,Oscar Erixson +1 more
TL;DR: In this article, the effects of wealth on health were investigated by exploiting exogenous variation in inherited wealth generated by the repeal of the Swedish inheritance tax, and the results showed that increased wealth has limited short to medium run impacts on objective adult health.
Journal ArticleDOI
Personal Wealth, Self-Employment, and Business Ownership
TL;DR: The authors studied the effect of personal wealth on entrepreneurial decisions using data on mineral payments from Texas shale drilling to individuals throughout the United States and found that large cash windfalls increase business formation by 0.8 to 2.1 percentage points, but do not affect transitions to self-employment.
Journal ArticleDOI
The effects of income on health: Evidence from lottery wins in Singapore
Seonghoon Kim,Kanghyock Koh +1 more
TL;DR: In this article, the causal effects of household income on self-reported health status by exploiting random variations in the amount of lottery prizes won were investigated in a country without strong social safety nets, and they found that a S$10,000 (US$7,245) increase in income via lottery wins improves individuals' health by a standard deviation of 0.18.
References
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Journal ArticleDOI
THE EQUITY PREMIUM A Puzzle
Rajnish Mehra,Edward C. Prescott +1 more
TL;DR: This paper showed that an equilibrium model which is not an Arrow-Debreu economy will be the one that simultaneously rationalizes both historically observed large average equity return and the small average risk-free return.
Journal ArticleDOI
Golden Eggs and Hyperbolic Discounting
TL;DR: The authors analyzes the decisions of a hyperbolic consumer who has access to an imperfect commitment technology: an illiquid asset whose sale must be initiated one period before the sale proceeds are received.
Journal ArticleDOI
Optimum consumption and portfolio rules in a continuous-time model☆
TL;DR: In this paper, the authors considered the continuous-time consumption-portfolio problem for an individual whose income is generated by capital gains on investments in assets with prices assumed to satisfy the geometric Brownian motion hypothesis, which implies that asset prices are stationary and lognormally distributed.
Journal ArticleDOI
Status quo bias in decision making
TL;DR: A series of decision-making experiments showed that individuals disproportionately stick with the status quo as mentioned in this paper, that is, doing nothing or maintaining one's current or previous decision, and that this bias is substantial in important real decisions.
Book ChapterDOI
Rational choice and the framing of decisions
Amos Tversky,Daniel Kahneman +1 more
TL;DR: In this article, the authors trace the violations of the rational theory of choice to the rules that govern the framing of decision and to the psychological principles of evaluation embodied in prospect theory, and argue that these rules are normatively essential but descriptively invalid.