Table 5. Ambiguity aversion and portfolio choice: check questions and financial assets.
This table shows results of probit regressions in which the dependent variable equals one if the respondent participates in the stock market. The main independent variable of interest in Panels A, B, and C are Ambiguity Aversion, Ambiguity Aversion Dummy, and Ambiguity Aversion Rank, respectively. Columns 2 and 4 exclude respondents whose answers to the check question were inconsistent with their earlier choices. Columns 3 and 4 exclude respondents who report financial assets of less than $500. All models include a constant term and controls for age, age-squared, male, white, Hispanic, married, (ln) number of children (plus one), health, education, employment status, (ln) family income, wealth, participation in defined contribution or defined benefit plans, financial literacy, trust, risk aversion, question order, a check question score equal to one if the subject got either of the check questions wrong (that is, they chose Box U in the first check question or Box K in the second check question), and missing data dummies. The independent variable in Panels A and C is standardized to facilitate interpretation. The table reports marginal effects. Standard errors are clustered by household and appear in brackets. · *, **, and *** denote significance at the 10%, 5%, and 1% level, respectively.
| Model | (1) | (2) | (3) | (4) |
|---|---|---|---|---|
| Panel A: Results for ambiguity aversion | ||||
|
| ||||
| Ambiguity Aversion | −0.020** [0.01] |
−0.025* [0.01] |
−0.037** [0.02] |
−0.047** [0.02] |
| Consistent responses only | No | Yes | No | Yes |
| Financial assets ≥ $500 | No | No | Yes | Yes |
| Controls and constant | Yes | Yes | Yes | Yes |
| N | 2,943 | 1,746 | 1,881 | 1,199 |
|
| ||||
| Panel B: Results for ambiguity aversion dummy | ||||
|
| ||||
| Ambiguity Aversion Dummy | −0.039** [0.02] |
−0.031 [0.02] |
−0.072*** [0.03] |
−0.058* [0.03] |
| Consistent responses only | No | Yes | No | Yes |
| Financial assets ≥ $500 | No | No | Yes | Yes |
| Controls and constant | Yes | Yes | Yes | Yes |
| N | 2,943 | 1,746 | 1,881 | 1,199 |
|
| ||||
| Panel C: Results for ambiguity aversion rank | ||||
|
| ||||
| Ambiguity Aversion Rank | −0.021** [0.01] |
−0.023* [0.01] |
−0.039*** [0.01] |
−0.043** [0.02] |
| Consistent Responses Only | No | Yes | No | Yes |
| Financial Assets ≥ $500 | No | No | Yes | Yes |
| Controls and constant | Yes | Yes | Yes | Yes |
| N | 2,943 | 1,746 | 1,881 | 1,199 |