Wealth Stratification and Portfolio Choice
AEA Papers and Proceedings
vol. 110,
May 2020
(pp. 411-15)
Abstract
This paper investigates the past decade's increase in wealth inequality along racial and ethnic lines. Using a new measure of wealth stratification based on data from the Survey of Consumer Finances, we find that stratification increased significantly for blacks from 2007 to 2016; Hispanics exhibited a similar but less pronounced trend. Our regression analysis shows that relative to whites, blacks and Hispanics tend to invest more in houses and less in stocks, controlling for observable demographic factors. Consequently, these groups did not benefit as much as whites from the decade's spectacular increase in stock prices.Citation
Boulware, Karl David, and Kenneth N. Kuttner. 2020. "Wealth Stratification and Portfolio Choice." AEA Papers and Proceedings, 110: 411-15. DOI: 10.1257/pandp.20201111Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- G11 Portfolio Choice; Investment Decisions
- G12 Equities; Fixed Income Securities
- G51 Household Saving, Borrowing, Debt, and Wealth
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination