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Review of Finance Advance Access originally published online on October 6, 2007
Review of Finance 2008 12(3):465-496; doi:10.1093/rof/rfm026
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© The Author 2007. Published by Oxford University Press on behalf of the European Finance Association. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Are Economists More Likely to Hold Stocks?*

Charlotte Christiansen1, Juanna Schröter Joensen2 and Jesper Rangvid3

1 CREATES, University of Aarhus
2 University of Aarhus
3 Copenhagen Business School

Using a large panel data set containing detailed information on educational attainments as well as financial and socioeconomic variables for individual investors, we show that economists are more likely to hold stocks than otherwise identical investors. First, we consider the change in stockholdings associated with (i) completing an economics education and (ii) an economist moving into the household. Second, we model stock market participation using a probit model with unobserved individual heterogeneity. Third, instrumental variables estimation allows us to identify the causal effect of an economics education on stock market participation. Throughout, we focus explicitly on the effect of a change in educational status on the likelihood of holding stocks.

JEL Classification: G11, G129, J24

* The authors would like to thank the Danish Social Science Research Council for financial support. Christiansen acknowledges support from CREATES funded by the Danish National Research Foundation. We appreciate useful comments from Marco Pagano (the editor), an anonymous referee, Magnus Dahlquist, Lars Norden, Andrei Simonov, Per Strömberg, Raman Uppal, Helena Skyt Nielsen, Michael Svarer, and Jesper Bagger, as well as from participants at the CEPR/Studienzentrum Gerzensee European Summer Symposium on Financial Markets, the EFA and EFMA conferences, the Symposium on Asset Allocation at Copenhagen Business School, the Arne Ryde Workshop at Lund University, the International Conference on Finance at the University of Copenhagen, and seminars at the University of Aarhus, Aarhus School of Business, the Stockholm Institute for Financial Research, and the Universitat Pompeu Fabra. The usual disclaimer applies. We are grateful to Anne Keller and Maria K. Humlum for their competent research assistance.


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