NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Andrei C. Miu

Babes-Bolyai University, Department of Psychology
Republicii St. #37, Cluj-Napoca 400015
Romania

E-Mail: andreimiu@psychology.ro
Institutional Affiliation: Babes-Bolyai University, Romania

NBER Working Papers and Publications

May 2015Socioeconomic Status and Learning from Financial Information
with Camelia M. Kuhnen: w21214
The majority of lower socioeconomic status (SES) households do not have any stock investments, which is detrimental to wealth accumulation. Here, we examine one potential driver of this puzzling fact, namely, that SES may influence the process by which people learn from information in financial markets. In an experimental setting we find that low SES participants, relative to medium or high SES ones, form more pessimistic beliefs about the distribution of stock investment outcomes and are less likely to invest in stocks. The pessimism bias in assessing risky assets induced by low SES is robust to several ways of measuring one’s socioeconomic standing and it replicates out of sample. These results suggest that SES shapes in predictable ways people’s beliefs about financial assets, which in ...

Published: Kuhnen, Camelia M. & Miu, Andrei C., 2017. "Socioeconomic status and learning from financial information," Journal of Financial Economics, Elsevier, vol. 124(2), pages 349-372. citation courtesy of

 
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