Homeownership and investment in risky assets in Europe

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

This study examines how housing influences households’ risky asset holdings in multiple European countries, using the 2004 Survey of Health, Ageing and Retirement in Europe (SHARE) data set. This research provides three major findings. First, homeowners in bank-based economies have a significantly lower probability of participating in the stock market, whereas in market-based economies, homeownership has no significant impact on this probability. Second, homeowners tend to invest a lower share of their financial assets in stocks compared to renters. Third, households with a higher home value to wealth ratio invest a lower share of financial assets in stocks in countries with more developed mortgage markets. In contrast, in countries with underdeveloped mortgage markets, households with a higher home value to wealth ratio invest a larger share of financial assets in stocks. The results of this study suggest that recognizing differences in financial market structures is crucial to understanding the relationship between housing investment and stock investment.

Original languageEnglish
Pages (from-to)254-267
Number of pages14
JournalReview of European Studies
Volume6
Issue number4
DOIs
Publication statusPublished - 2014 Sep 1

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assets
homeowner
market
housing
economy
stock market
financial market
retirement
Values
bank
Household
health
Wealth
Mortgages
Economy
Stock Market
Holdings
Health
Financial Markets
Retirement

All Science Journal Classification (ASJC) codes

  • Cultural Studies
  • History

Cite this

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Homeownership and investment in risky assets in Europe. / Cho, Insook.

In: Review of European Studies, Vol. 6, No. 4, 01.09.2014, p. 254-267.

Research output: Contribution to journalArticle

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