Kauppakorkeakoulun julkaisuportaali
Aalto-yliopiston kauppakorkeakoulun gradujen tiedot nyt Aaltodocissa: Aaltodoc-julkaisuarkisto
Kauppakorkeakoulu | Laskentatoimen ja rahoituksen laitos | Rahoitus | 2010
Tutkielman numero: 12385
Stock market participation and household characteristics in Europe
Tekijä: Laakso, Elina
Otsikko: Stock market participation and household characteristics in Europe
Vuosi: 2010  Kieli: eng
Laitos: Laskentatoimen ja rahoituksen laitos
Aine: Rahoitus
Asiasanat: rahoitus; financing; osakemarkkinat; stock markets; kotitaloudet; households; Eurooppa; Europe
Sivumäärä: 96
» hse_ethesis_12385.pdf pdf  koko: 1002 KB (1025872)
Avainsanat: stock market participation; risk aversion; sociability; political orientation; interpersonal trust; cognitive skills; health; life satisfaction; religiousness

The purpose of this study is to shed more light to limited stock market participation which has been found to have many implications on both household level and public at large. To reach this goal, I analyze a comprehensive list of stock market participation drivers and compare their explanatory power. Even though limited stock market participation is widely studied in the field of household finance, this is the first paper to comprehensively summarize a range of household characteristics associated with stock market participation and to test the robustness of these characteristics in explaining stock market participation, controlling for all relevant demographic variables.

This study focuses both on the established drivers of stock ownership, that is, wealth, risk aversion and education, and on the more recently studied drivers of stock ownership, that is, social interaction, trust, personal values, cognitive skills and health. In addition, this study introduces two new stock market participation drivers to household finance, that is, life satisfaction and conservatism, and is the first to analyze the direct effect of religiousness on the probability of holding stocks.


This study employs data from the cross-European Survey on Health, Ageing and Retirement in Europe (SHARE), which includes a comprehensive set of questions related to various aspects of life as well as information on the respondents’ financial wealth. The second wave of SHARE used in this paper includes in total 34,415 respondents and covers fourteen European countries.


I find that, in addition to demographic variables and risk aversion, sociability, personal values, cognitive skills, health, life satisfaction and religion play a statistically significant role in stock market participation. Risk aversion stands out as the single most economically significant driver of stock market participation, and furthermore, all characteristics included in this study seem to explain the level of individual risk aversion. After risk aversion and demographic variables, sociability and political orientation have the most explanatory power in the probability of holding stocks. Surprisingly, trust has an insignificant effect on stockholding throughout the study. Cognitively able persons are more likely to participate in the stock market but none of the individual skills, numerical skills, recall ability and verbal fluency, stand out from the rest. Life satisfaction increases the likelihood of holding stocks, whereas poor health, religiousness and conservatism have an adverse effect on stock market participation.
Verkkojulkaisut ovat tekijänoikeuden alaista aineistoa. Teokset ovat vapaasti luettavissa ja tulostettavissa henkilökohtaista käyttöä varten. Aineiston käyttö kaupallisiin tarkoituksiin on kielletty.