|Title||Portfolio decisions and perceived racial discrimination|
|Publication Type||Journal Article|
|Year of Publication||2023|
|Authors||Bucciol, A, Papadovasilaki, D|
|Journal||JOURNAL OF BEHAVIORAL AND EXPERIMENTAL ECONOMICS|
|Keywords||Racial Discrimination, racial wealth inequality, risky assets|
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.