What drives the association between health and portfolio choice?

C. Kronenberg, H. van Kippersluis and K.I.M. Rohde

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: There is a persistent association between health and portfolio choice, but hardly anything is known about the underlying sources of heterogeneity: what makes healthier individuals hold more risky assets? This paper uses rich Dutch longitudinal data to take into account and explain unobserved heterogeneity in the association between health and portfolio choice. We show that the association largely reflects unobserved heterogeneity, which is driven partly by behavioural variables. Yet even when adding an extensive set of behavioural variables including risk aversion, stock aversion, loss aversion, time preferences, and mental accounting, the association betweenhealth and portfolio choice does not completely vanish.

Keywords: health; portfolio choice; panel data; elderly (search for similar items in EconPapers)
JEL-codes: C23 D14 G11 I19 (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-cbe and nep-hea
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Persistent link: https://EconPapers.repec.org/RePEc:yor:hectdg:14/27

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