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STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION

Year 2012, Volume: 4 Issue: 2, 285 - 294, 01.12.2012

Abstract

This paper investigates the link between financial literacy and stock market participation. We provide an assessment of the level of financial literacy in the French population using standard and original measures. Based on eight questions asked to individuals to assess their level of financial literacy, we construct two indices: basic financial requirements and financial culture. Regression results reveal strong impact of financial culture on the probability to hold stocks and weaker impact of basic financial requirements. Thereby, we contribute to the extensive literature intending to account for the stock market participation puzzle

References

  • Alessie Rob J.M., Annamaria Lusardi and Maarten C.J. van Rooij (2011), “Financial Literacy and Stock Market Participation”, Journal of Financial Economics, No. 101, pp.449-472.
  • Arrow Kenneth (1965), “Aspect of the Theory of Risk Bearing”, Yrjö Jahnsson foundation, Helsinki.
  • Barsky Robert B., F. Thomas Juster, Miles S. Kimball and Matthew D. Shapiro (1997), “Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study”, Quaterly Journal of Economics, Vol. 112, No. 2, pp.537-579.
  • Bertaut Carol C. and Michael Haliassos (1995), “Why do so few hold stocks?”, The Economic Journal, Vol. 105, No. 432, pp.1110-1129.
  • Christelis Dimitris, Tullio Jappelli and Mario Padula (2010), “Cognitive Abilities and Portfolio Choice”, European Economic Review, No. 54, pp.18-38.
  • Epstein Larry G. and Stanley E. Zin (1990), “First-Order Risk Aversion and the Equity Premium Puzzle”, Journal of Monetary Economics, No. 26, pp.387-407.
  • Haliassos Michael (2003), “Stockholding: Recent Lessons from Theory and Computations”, (in: Guiso, Haliassos and Jappelli-Ed., Stockholding in Europe, New-York, NY: Palgrave Macmillan).
  • Haliassos Michael and Alexander Michaelides (2001), “Calibration and Computation of Household Portfolio Models”, (in: Guiso, Haliassos and Jappelli- Ed., Household Portfolio Choice, Cambridge, MA: MIT Press).
  • Haliassos Michael and Alexander Michaelides (2003), “Portfolio choice and Liquidity Constraints”, International Economic Review, Vol. 44, No. 1, pp.143- 177.
  • Heaton John and Deborah Lucas (2000a), “Portfolio Choice in the Presence of Background Risk”, The Economic Journal, No. 110, pp.1-26.
  • Heaton John and Deborah Lucas (2000b), “Asset Pricing and Portfolio Choice: the Importance of Entrepreneurial Risk”, Journal of Finance, No. 55, pp.1163-98. Lusardi Annamaria (2011), The Role of Financial Literacy, Proceedings from Banque de France Conference, March 24-25.
  • Lusardi Annamaria and Olivia S. Mitchell (2007), “Baby Boomer Retirement Security; the Roles of Planning, Financial Literacy, and Housing Wealth”, Journal of Monetary Economics, No. 54, pp.205-224.
  • Merton Robert C. (1969), “Portfolio Selection under Uncertainty: the Continuous- Time case”, The Review of Economics and Statistics, Vol. 51, No. 3, pp.247-257.
  • Remund David L. (2010), “Financial Literacy Explicated: the Case for a Clearer Definition in an Increasingly Complex Economy”, Journal of Consumer Affairs, Vol. 44, No. 2, pp.276-295.
  • Samuelson Paul A. (1969), “Lifetime Portfolio Selection by Dynamic Stochastic Programming”, Review of Economics and Statistics, No. 51, pp.239-246.
Year 2012, Volume: 4 Issue: 2, 285 - 294, 01.12.2012

Abstract

References

  • Alessie Rob J.M., Annamaria Lusardi and Maarten C.J. van Rooij (2011), “Financial Literacy and Stock Market Participation”, Journal of Financial Economics, No. 101, pp.449-472.
  • Arrow Kenneth (1965), “Aspect of the Theory of Risk Bearing”, Yrjö Jahnsson foundation, Helsinki.
  • Barsky Robert B., F. Thomas Juster, Miles S. Kimball and Matthew D. Shapiro (1997), “Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study”, Quaterly Journal of Economics, Vol. 112, No. 2, pp.537-579.
  • Bertaut Carol C. and Michael Haliassos (1995), “Why do so few hold stocks?”, The Economic Journal, Vol. 105, No. 432, pp.1110-1129.
  • Christelis Dimitris, Tullio Jappelli and Mario Padula (2010), “Cognitive Abilities and Portfolio Choice”, European Economic Review, No. 54, pp.18-38.
  • Epstein Larry G. and Stanley E. Zin (1990), “First-Order Risk Aversion and the Equity Premium Puzzle”, Journal of Monetary Economics, No. 26, pp.387-407.
  • Haliassos Michael (2003), “Stockholding: Recent Lessons from Theory and Computations”, (in: Guiso, Haliassos and Jappelli-Ed., Stockholding in Europe, New-York, NY: Palgrave Macmillan).
  • Haliassos Michael and Alexander Michaelides (2001), “Calibration and Computation of Household Portfolio Models”, (in: Guiso, Haliassos and Jappelli- Ed., Household Portfolio Choice, Cambridge, MA: MIT Press).
  • Haliassos Michael and Alexander Michaelides (2003), “Portfolio choice and Liquidity Constraints”, International Economic Review, Vol. 44, No. 1, pp.143- 177.
  • Heaton John and Deborah Lucas (2000a), “Portfolio Choice in the Presence of Background Risk”, The Economic Journal, No. 110, pp.1-26.
  • Heaton John and Deborah Lucas (2000b), “Asset Pricing and Portfolio Choice: the Importance of Entrepreneurial Risk”, Journal of Finance, No. 55, pp.1163-98. Lusardi Annamaria (2011), The Role of Financial Literacy, Proceedings from Banque de France Conference, March 24-25.
  • Lusardi Annamaria and Olivia S. Mitchell (2007), “Baby Boomer Retirement Security; the Roles of Planning, Financial Literacy, and Housing Wealth”, Journal of Monetary Economics, No. 54, pp.205-224.
  • Merton Robert C. (1969), “Portfolio Selection under Uncertainty: the Continuous- Time case”, The Review of Economics and Statistics, Vol. 51, No. 3, pp.247-257.
  • Remund David L. (2010), “Financial Literacy Explicated: the Case for a Clearer Definition in an Increasingly Complex Economy”, Journal of Consumer Affairs, Vol. 44, No. 2, pp.276-295.
  • Samuelson Paul A. (1969), “Lifetime Portfolio Selection by Dynamic Stochastic Programming”, Review of Economics and Statistics, No. 51, pp.239-246.
There are 15 citations in total.

Details

Other ID JA38JP69SK
Journal Section Articles
Authors

Luc Arrondel This is me

Majdi Debbich This is me

Frédérique Savignac This is me

Publication Date December 1, 2012
Published in Issue Year 2012 Volume: 4 Issue: 2

Cite

APA Arrondel, L., Debbich, M., & Savignac, F. (2012). STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION. International Journal of Social Sciences and Humanity Studies, 4(2), 285-294.
AMA Arrondel L, Debbich M, Savignac F. STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION. IJ-SSHS. December 2012;4(2):285-294.
Chicago Arrondel, Luc, Majdi Debbich, and Frédérique Savignac. “STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION”. International Journal of Social Sciences and Humanity Studies 4, no. 2 (December 2012): 285-94.
EndNote Arrondel L, Debbich M, Savignac F (December 1, 2012) STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION. International Journal of Social Sciences and Humanity Studies 4 2 285–294.
IEEE L. Arrondel, M. Debbich, and F. Savignac, “STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION”, IJ-SSHS, vol. 4, no. 2, pp. 285–294, 2012.
ISNAD Arrondel, Luc et al. “STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION”. International Journal of Social Sciences and Humanity Studies 4/2 (December 2012), 285-294.
JAMA Arrondel L, Debbich M, Savignac F. STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION. IJ-SSHS. 2012;4:285–294.
MLA Arrondel, Luc et al. “STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION”. International Journal of Social Sciences and Humanity Studies, vol. 4, no. 2, 2012, pp. 285-94.
Vancouver Arrondel L, Debbich M, Savignac F. STOCKHOLDING AND FINANCIAL LITERACY IN THE FRENCH POPULATION. IJ-SSHS. 2012;4(2):285-94.