TY  - JOUR
AU  - Mehra,Rajnish
TI  - The Equity Premium in India
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12434
PY  - 2006
Y2  - August 2006
UR  - http://www.nber.org/papers/w12434
L1  - http://www.nber.org/papers/w12434.pdf
N1  - Author contact info:
Rajnish Mehra
Department of Economics
W. P. Carey School of Business
Arizona State University
PO Box 879801
Tempe, AZ  85287-9801
Tel: 480 965-6335
Fax: 480 965-0748
E-Mail: rajnish.mehra@asu.edu
AB  - In this article we examine the Equity Premium in the Indian context and review the related literature.  The equity premium is the returned earned by a well-diversified stock portfolio in excess of that earned by a risk free security such as a Treasury Bill. Consistent with U.S. experience we find that the Indian equity premium has been quite high in the post 1991 period, averaging 9.7% above the corresponding risk free security.  It is difficult to justify such a premium based on theoretical considerations.

The article is an entry prepared for the Oxford Companion to Economics in India edited by Kaushik Basu
ER  -