Portfolio decisions and perceived racial discrimination

TitlePortfolio decisions and perceived racial discrimination
Publication TypeJournal Article
Year of Publication2023
AuthorsBucciol, A, Papadovasilaki, D
JournalJOURNAL OF BEHAVIORAL AND EXPERIMENTAL ECONOMICS
Volume106
Pagination102062
Date PublishedOCT
ISSN Number2214-8043
KeywordsRacial Discrimination, racial wealth inequality, risky assets
Abstract

We use data from the US Health and Retirement Study to examine the relationship between individual portfolio decisions and perceived discrimination, with a focus on racial discrimination. We show that sensing racial discrimination has a bigger association with shaping portfolio decisions than any other type of discrimination. Perceived racial discrimination is correlated not only with the choice to opt-in risky financial assets, but also the amount of assets held. Specifically, racial discrimination is associated with reducing the probability of holding risky assets by 4.0% and reducing the amount of these holdings by 4.2%. Most of the respondents who report being racially discriminated against, are non-White, and thus such experiences add to the racial wealth inequality.

DOI10.1016/j.socec.2023.102062
Citation Key WOS:001037843700001