Seminario Applied

Dimitris Christelis

University of Glasgow


Seminario 3 – 14:30


We use new euro area representative data from the Consumer Expectations Survey (CES) to elicit household-specific propensities to invest and consume out of positive wealth shocks. Using a randomized assignment of hypothetical lottery gains ranging from 5,000 to 50,000 euro and a realistic menu of consumption, saving and asset choices, we estimate the causal effect of wealth shocks on risky asset ownership and conditional asset shares. Wealth shocks have a positive effect on stockholding (about a 10 percentage points increase in participation for the largest wealth shock). The majority of households do not participate in the stock market, even after a large increase in wealth. The conditional asset share invested in risky assets is constant for wealth shocks up to 20,000 euro, and edges up slightly (by about 2 percentage points) for larger prizes, and particularly among financially knowledgeable consumers. Our evidence implies that preferences are characterized by Constant Relative Risk Aversion (CRRA) for the majority of risky asset investors.

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