CF weekly workshop
Nov 23, 2010
from 05:00 PM to 06:00 PM
|Where||Winstanley Lecture Theatre, Trinity College|
|Contact Name||Rachel Marston|
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Dr Hector Calvo Pardo (University of Southampton) presenting.
Title: Households' Subjective Stock Market Expectations and Portfolio Choice
Abstract: Households portfolios remain poorly understood. The theory emphasizes the central role of beliefs to understand choices at both the extensive and the intensive margins (participation and conditional demands). Only recently have beliefs started to be elicited systematically in large scale surveys. Here we employ a novel methodology to elicit French households' subjective beliefs about Stock Market returns, to find that they are crucial in explaining both margins. Importantly, we are able to control for households' heterogeneous information sets. In addition, we show that subjective beliefs about Stock Market performance can explain the observed hump-shaped age-portfolio profiles.