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Could French and Eurozone Savers Invest More in Risky Assets?

Author

Listed:
  • Luc Arrondel

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • André Masson

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

During the crisis, French savers are turning even more towards safe, short-term assets or real estate and away from more risky and long-term financial investments. This state of affairs is a cause of concern to some analysts, who are looking for ways to encourage households to take more risks and put more of their savings into productive investment. Theoretical and statistical analysis show that this reluctance to invest in the stock market comes as much from the supply side – transaction costs in the broad sense, relatively unfavourable taxation that reduces the expected return – as from the demand side – lack of financial education among savers, aversion to risks perceived as being too high, exposure to other risks (income, unemployment, family, health, housing, human capital). In this article, after analyzing financial behaviours in France and Europe, we propose a number of propositions for redirecting savings towards more risky investments.

Suggested Citation

  • Luc Arrondel & André Masson, 2015. "Could French and Eurozone Savers Invest More in Risky Assets?," Post-Print halshs-01203541, HAL.
  • Handle: RePEc:hal:journl:halshs-01203541
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    Cited by:

    1. Luc Arrondel & Jérôme Coffinet, 2021. "Preparing for the tax reform: the risky French households' portfolio in 2018," PSE Working Papers halshs-03322577, HAL.
    2. Luc Arrondel & André Masson, 2017. "Why does household demand for shares decline during the crisis? The French case," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 494-495-4, pages 155-177.

    More about this item

    Keywords

    Individual portfolio choice; Household financial decisions; Risky asset demand; Cross country comparisons;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D1 - Microeconomics - - Household Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D3 - Microeconomics - - Distribution

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