Household financial market participation: evidence from spanish micro data

Abstract

Participación en los mercados financieros y perfil de riesgo de las familias españolas a través de la Encuesta Financiera de las familias publicada por el Banco de EspañaIn this paper we study the non-participation puzzle using the Spanish Survey of Household Finances (EFF), which has detailed information about household financial wealth. We find that the propensity to invest in risky assets is strongly associated with financial household features, such as income and financial wealth, and with some demographic characteristics, like age, sex, housing and labor status, for both direct and indirect financial asset ownership. These empirical results point to the relevance of the life-cycle model and the financial wealth as explanatory elements of the household financial market participation. We also show that the defining variables of the financial behavior are consistent with the observed pattern of participation across developed countries, as United States and Austria