nep-neu New Economics Papers
on Neuroeconomics
Issue of 2013‒10‒02
one paper chosen by
Daniel Houser
George Mason University

  1. The Influence of Non-Cognitive and Cognitive Ability on Individuals’ Stock Market Participation By Gyllenram, André; Hanes, Niklas; Hellström, Jörgen

  1. By: Gyllenram, André (Department of Economics, Umeå School of Business and Economics); Hanes, Niklas (Department of Economics, Umeå School of Business and Economics); Hellström, Jörgen (Umeå School of Business and Economics)
    Abstract: Stock market participation is found to be positively related to cognitive, as well as non-cognitive ability, controlling for wealth, income, age, and other demographic and socioeconomic factors. Interestingly, the effects are of economic significant magnitudes, e.g. participation is on average 11.49% larger among those with high compared with low cognitive and non-cognitive abilities, and holds also when controlling for individuals risk preferences. The later indicates that cognitive and non-cognitive abilities have a role in affecting financial decisions also through non-preference driven effects. Limitations in non-cognitive ability do further explain non-participation among affluent individuals.
    Keywords: Household finance; Investor behavior; Stock market participation; Psychological traits; Intelligence; Risk preferences
    JEL: D14 G11
    Date: 2013–09–30

This nep-neu issue is ©2013 by Daniel Houser. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.