Down or Out: Assessing the Welfare Costs of Household Investment Mistakes.

DSpace/Manakin Repository

Down or Out: Assessing the Welfare Costs of Household Investment Mistakes.

Citable link to this page

. . . . . .

Title: Down or Out: Assessing the Welfare Costs of Household Investment Mistakes.
Author: Sodini, Paolo; Campbell, John; Calvet, Laurent E.

Note: Order does not necessarily reflect citation order of authors.

Citation: Calvet, Laurent E., John Y. Campbell, and Paolo Sodini. 2007. Down or out: assessing the welfare costs of household investment mistakes. Journal of Political Economy 115(5): 707-747.
Full Text & Related Files:
Abstract: This paper investigates the efficiency of household investment decisions using comprehensive disaggregated Swedish data. We consider two main sources of inefficiency: underdiversification (“down”) and nonparticipation in risky asset markets (“out”). While a few households are very poorly diversified, most Swedish households outperform the Sharpe ratio of their domestic stock index through international diversification. Financially sophisticated households invest more efficiently but also more aggressively, and overall they incur higher return losses from underdiversification. The return cost of nonparticipation is smaller by almost one‐half when we take account of the fact that nonparticipants would likely be inefficient investors.
Published Version: http://dx.doi.org/10.1086/524204
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:3122488

Show full Dublin Core record

This item appears in the following Collection(s)

  • FAS Scholarly Articles [6464]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University
 
 

Search DASH


Advanced Search
 
 

Submitters