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Participation in risky asset markets and propensity for financial planning: a missing link?
Author(s) -
Eugster Marco
Publication year - 2019
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12297
Subject(s) - financial literacy , propensity score matching , asset (computer security) , stock market , financial market , economics , stock (firearms) , retirement planning , asset allocation , business , financial plan , finance , mechanical engineering , portfolio , paleontology , statistics , mathematics , computer security , horse , computer science , engineering , biology
This study examines whether the association between financial literacy and participation in risky asset markets is robust to variation on a more innate level: the propensity for financial planning. I find that individuals’ propensity for financial planning is strongly positively related to stock market participation as well as membership in a voluntary workplace retirement savings scheme. This result holds when controlling for financial literacy and a range of demographic and control variables in a multivariate regression setting. Importantly, the positive association between financial literacy and risky asset market participation also persists, suggesting that these two variables operate through separate channels.