Household Portfolio Selection of Businessmen Aged 30 to 49 Years Old

Abstract

We empirically analyzed factors affecting the household portfolio choices of 30- to 49-year-old male company employees in Japan. We found that whether or not households invest in stocks depends on the subjective expected return of stock, household income level, financial asset holdings, as well as financial literacy level and subjective cost of stock investment. For stockholders, the allocation to stocks depends on the subjective expected return of stock, subjective cost of stock investment, and financial literacy level. For non-stockholders, the decision of whether to begin stock investment depends mainly on the subjective expected return of stock. According to past empirical studies, household income and financial asset holdings are two major factors affecting household stock investment decisions. However, we confirmed that household stock investment decisions are also affected by behavioral factors such as financial literacy level and subjective cost of stock investment.