Appendix Table 2.
Decision to Own Stocks
| Dependent Variable: Indicator of Stock Ownership
| ||
|---|---|---|
| Parameter | Marginal Effect on Probability | |
| Log Risk Tolerance | ||
| Individual Panel Average |
0.10 (0.03) |
|
| Current – Panel Average |
0.09 (0.04) |
|
| Male | 0.03 (0.03) |
0.01 (0.03) |
| High School Drop Out |
−0.15 (0.03) |
−0.15 (0.03) |
| Some College | 0.06 (0.03) |
0.04 (0.03) |
| College Graduate |
0.19 (0.04) |
0.16 (0.04) |
| Post Graduate |
0.11 (0.04) |
0.07 (0.04) |
| Log of Current Wealth |
0.14 (0.01) |
0.15 (0.01) |
| Log of Average Wealth |
0.15 (0.02) |
0.16 (0.02) |
|
| ||
| Predicted Probability | 0.31 | 0.34 |
| Log-Likelihood | −6904.94 | −6897.3 |
NOTE: Asymptotic standard errors are in parentheses. Estimates in bold are statistically significant at the 5% level. The correlated random effects probit is estimated on a balanced panel with 2,464 financial respondents and 14,784 total observations from the 1992 to 2002 HRS. The model of stock ownership includes all the covariates from the model of risk tolerance (see Appendix Table 1) except for the fraction of exact probability responses, job displacements and health conditions. The stock ownership model adds indicator variables for the survey waves. The marginal effect of a variable on the probability to own stocks is computed at the median values of the variables with the random effect equal to 0.