Racial differences in risky asset ownership: A two-stage model of the investment decision-making process

Journal of Financial Counseling and Planning

Volumn 17, Issue 2, 2006, Pages 64-78

  Gutter, Michael S ^a   Fontes, Angela ^a  

^a UNIVERSITY OF WISCONSIN MADISON   (United States)

Author keywords

Investor behavior; Portfolio allocation; Race; Risk tolerance; Stocks

Indexed keywords

EID: 60649097307     PISSN: 10523073     EISSN: 19477910     Source Type: Journal    
DOI: None     Document Type: Article

References (47)

1. Aizcorbe, A. M., Kennickell, A. B., & Moore, K. B. (2003). Recent changes in U.S. family finances: Evidence from the 1998 and 2001 Survey of Consumer Finances. Federal Reserve Bulletin, 89, 1-32.
2. Altonji, J. G., & Doraszelski, U. (2005). The role of permanent income and demographics in Black/White difference in wealth. The Journal of Human Resources, 40, 1-30.
3. st Session. Retrieved from http://thomas.loc.gov/cgi-bin/query/C?c105:./temp/c105mpMGox
4. Bajtelsmit, V., & VenDerhei, J. (1997). Risk aversion and pension investment choices. In M. Gordon, O. Mitchell, & M. Twinney (Eds.), Positioning pensions for the twenty-first century (pp. 45-66). Philadelphia, PA: Pension Research Council and University of Pennsylvania Press.
5. Bertaut, C. C. (1998). Stockholding behavior of U.S. households: Evidence from the 1983-1989 Survey of Consumer Finances. The Review of Economics and Statistics, 80(2), 263-275.
6. Boyce, J. N. (1998, April 9). Blacks are bearish on Wall Street says new survey. The Wall Street Journal.
7. Brimmer, A. F. (1988). Income, wealth, and investment behavior in the Black community. The American Economic Review, 78(2), 151-155.
8. Burlew, A. K., Banks, W. C., McAdoo, H., Ajani, D., & Azibo, Y. A. (1992). African American psychology. Newbury Park, CA: Sage Publications.
9. Campbell, J. Y., & Viceira, L. M. (2002). Strategic asset allocation. New York: Oxford University Press.
10. Chiteji, N., & Stafford, F. P. (1999). Portfolio choices of parents and their children as young adults: Asset accumulation by African-American families. American Economic Review, 89(2), 377-380.
11. Choudhury, S. (2001). Racial and ethnic differences in wealth and asset choices. Social Security Bulletin, 64 (4).
12. Coleman, S. (2003). Risk tolerance and the investment behavior of Black and Hispanic heads of household. Financial Counseling and Planning, 14(2). 43-52.
13. Coles, F., Jr. (1975). Black economic development. Chicago: Nelson Hall.
14. Conley, D. (1999). Being black, living in the red. Los Angeles, CA: University of California Press.
15. Darity, W., Jr. (1999). History, discrimination, and racil inequality. In W. Spriggs (Ed.), The state of Black America 1999: The impact of color-consciousness in the United States (pp. 153-166). New York: National Urban League.
16. Friend, I., & Blume, M. (1975). The demand for risky assets. The American Economic Review, 65(5), 900-922.
17. Gittleman, M., & Wolff, E. N. (2004). Racial differences in patterns of wealth accumulation. The Journal of Human Resources, 39, 193-224.
18. Gutter, M. S., Fox, J., & Montalto, C. P. (1999). Racial differences in investor decision making. Financial Services Review, 8(3), 149-162.
19. Hagendoorn, L. (1993). Ethnic categorization and outgroup exclusion: Cultural values and social stereo types in the construction of social hierarchies. Ethnic and Racial Studies, 16(1), 26-51.
20. Haliassos, M., & Bertaut, C. C. (1995). Why do so few hold stocks? The Economic Journal, 105, 1110-1129.
21. Hanna, S., & Chen, P. (1997). Subjective and objective risk tolerance: Implications for optimal portfolios. Financial Counseling and Planning, 8(2), 17-26.
22. Heckman, J. (1974). Shadow prices, market wages, and labor supply. Econometrica, 42(4), 679-694.
23. Heckman, J. (1976). The common structure of statistical models of truncation, sample selection and limited dependent variables and a sample estimator for such models. Annals of Economic and Social Measurement, 5, 475-92.
24. Hong, H., Kubik, J. D., & Stein, J. C. (2004). Social interaction and stock market participation. The Journal of Finance, 59(1), 137-163.
25. Ibbotson Associates. (1997). Stocks, bonds, bills, and inflation 1997 yearbook. Chicago: Ibbotson Associates.
26. Jackson, J., & Lindley, J. (1989). Measuring the extent of wage discrimination: A statistical test and a caveat. Applied Economics, 21, 515-540.
27. Jianakoplos, N. A., & Bernasek, A. (1998). Are women more risk averse? Economic Inquiry, 36(4), 620-30.
28. Keister, L. A. (2000). Race and wealth inequality: The impact of racial differences in assets ownership on the distribution of household wealth. Social Science Research, 29, 477-502.
29. rd ed.). Cambridge, MA: The MIT Press.
30. Kennickell, A. B. (2003). A rolling tide: Changes in the distribution of wealth in the U.S., 1989-2001 (Working Paper). Washington DC: The Federal Reserve Board. Retrieved from http://federalreserve.gov/pubs/oss/oss2/scfindex.html
31. Kreinin, M. E. (1959). Factors associated with stock ownership. The Review of Economics and Statistics, 41(1), 12-23.
32. Loury, G. C. (1998, June 7). Why more Blacks don't invest. The New York Times Magazine.
33. Mabry, T. (1999, May 14). Black investors stay away from stocks. The Wall Street Journal.
34. Markowitz, H. (1952). Portfolio selection. The Journal of Finance, 7(1), 77-91.
35. Montalto, C. P., & Sung, J. (1996). Multiple imputation in the 1992 Survey of Consumer Finances. Financial Counseling and Planning, 7, 133-146.
36. Oliver, M. L., & Shapiro, T. M. (1997). Black wealth/ White wealth: A new perspective on racial inequality. New York: Routledge.
37. Palm, T. (1972). The limitations of standard theory. In H. Vatter & T. Palm (Eds.), Economics of Black America (pp. 35-42). New York: Harcourt Brace Jovanovich, Inc.
38. Rubin, D. B. (1987). Multiple imputation for nonresponse in surveys. New York: John Wiley Sons.
39. Samuelson, P. A. (1969). Lifetime portfolio selection by dynamic stochastic programming. The Review of Economics and Statistics, 51(3), 239-246.
40. Stevenson, T. H., & Plath, D. A. (2002). Marketing financial services to the African American consumer: A comparative analysis of investment portfolio consumption. California Management Review, 44(4), 39-64.
41. Straight, R. L. (2001). Survey of Consumer Finances: Asset accumulation differences by race. The Review of Black Political Economy, 29(2), 67-81.
42. Vatter, H. (1972). The differential status of Black Americans. In H. Vatter & T. Palm (Eds.), Economics of Black America (pp. 3-9). New York: Harcourt Brace Jovanovich, Inc.
43. Wang, H., & Hanna, S. (1997). Does risk tolerance decrease with age? Financial Counseling and Planning, 8(2), 27-31.
44. Williams, R. M. (1999). Unfinished business: African-American political economy during the age of 'colorblind politics.' In W. Spriggs (Ed.), The state of Black America 1999: The impact of color-consciousness in the United States (pp. 137-152). New York: National Urban League.
45. Yao, R., Gutter, M. S., & Hanna, S. D. (2005). The financial risk tolerance of Blacks, Hispanics, and Whites. Financial Counseling and Planning, 16(1), 51-62.
46. Yao, R., Hanna, S., & Lindamood, S. (2004). Changes in financial risk tolerance, 1983-2001. Financial Services Review, 13(4), 249-266.
47. Zhong, L. X., & Xiao, J. J. (1995). Determinants of family bond and stock holdings. Financial Counseling and Planning, 6, 107-114.