Work

IQ and Stock Market Participation

Year: 2011

Type: article

Abstract: ABSTRACT Stock market participation is monotonically related to IQ, controlling for wealth, income, age, and other demographic and occupational information. The high correlation between IQ and participation exists even among the affluent. Supplemental data from siblings, studied with an instrumental variables approach and regressions that control for family effects, demonstrate that IQ's influence on participation extends to females and does not arise from omitted familial and nonfamilial variables. High‐IQ investors are more likely to hold mutual funds and larger numbers of stocks, experience lower risk, and earn higher Sharpe ratios. We discuss implications for policy and finance research.

Source: The Journal of Finance

DOI: 10.1111/j.1540-6261.2011.01701.x

Authors: MARK GRINBLATT, MATTI KELOHARJU, JUHANI LINNAINMAA

Institutions: National Bureau of Economic Research, University of California, Los Angeles, Yale University, Centre for Economic Policy Research, Research Institute of Industrial Economics, Aalto University, Dartmouth College, Research Council of Finland, University of Chicago

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2152034018

FWCI: 54.38

Cites: 80

Cited by: 715

Related to: 9