Year: 2009
Type: dissertation
Study design: Observational Study
Abstract: PURPOSE OF THE STUDY\n\nThe objective of this study is to find out whether personal values affect the decision of an\nindividual to invest in the stock market. The main motivation is to shed further light on the\nphenomenon of limited stock market participation, which has been shown to have significant\neconomic impacts, both micro and macro. By investigating the influence of personal values on\nthe probability of participation and on the different reasons for non-participation, the study fills a\ngap in the existing behavioral finance literature.\n\nAs the topic has not been researched before, generally accepted methodologies do not exist. Thus\nmy paper also contributes by introducing a method to connect personal values to investment\ndecisions. The approach I choose is to combine the theory of personal values of Schwartz (1992)\nto stock market participation. This method provides measures of both personal values and\ninvestment behavior that are easy to quantify.\n\nDATA\n\nMy data consist of information gathered using a tailored questionnaire about the demographics,\ncharacteristics, investment experience, and personal values of a respondent. The sample includes\n320 university students from the Helsinki area in Finland. According to the university attended,\nthe respondents can be grouped into students of business, technology, and natural or social\nscience.\n\nRESULTS\n\nI find that personal values significantly affect the probability of stock market participation. The\nrespondents who emphasize the Self-Enhancement values of power and achievement are more\nlikely to have invested in the stock market than the others. The influence of value orientation is\nstronger than that of several previously suggested determinants of participation, which shows\nthat differences in personal values are partly causing the limited participation phenomenon.\nWhen studying the reasons for non-participation reported by the respondents, I also find\nevidence of the effect of values. Emphasis of the Conservation values of tradition, conformity,\nand security increases the probability of reporting non-interest in stocks and equity funds as the\nreason for not investing.\n\nKEYWORDS\n\nStock market participation, personal values
Source: Aaltodoc (Aalto University)
Author: Niilo Luotonen
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2601723974