Full Citation

Title: Till Death (or Divorce) Do Us Part: Early-Life Family Disruption and Investment Behavior

Citation Type: Working Paper

Publication Year: 2019

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Abstract: We document a long-lasting association between a common societal phenomenon, early-life family disruption, and investment behavior. Fund managers who experienced the death or divorce of their parents during childhood take lower risk and are more likely to sell their holdings following risk-increasing firm events. They make smaller tracking errors, hold fewer lottery stocks, and show a stronger disposition effect. The results strengthen as treatment intensifies, i.e., when disruption occurred during formative years, when bereaved families had less social support, and after (unexpected) parental deaths. The evidence adds to our understanding of the role of social factors and “nurture” in finance.

Url: https://www.sciencedirect.com/science/article/abs/pii/S0378426621000157

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Authors: Betzer, André; Limbach, Peter; Rau, P. Raghavendra; Schürmann, Henrik

Series Title: CFR Working Paper

Publication Number: 19-01

Institution: CFR

Pages: 42

Publisher Location:

Data Collections: IPUMS USA

Topics: Family and Marriage, Other

Countries: United States