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Explaining the 2004 Decrease in Minority Stock Ownership

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  • Ajamu Loving
  • Michael Finke
  • John Salter

Abstract

Prior literature has examined minority stock market participation and found that it increased rapidly throughout the 1990’s and into the early 2000’s. However, in 2004 after stock prices had suffered decline, Black and Hispanic market participation fell off sharply. This paper uses the NLSY 79 a panel data set to examine whether the diminished likelihood of Black and Hispanic 2004 market participation is due to race or variation in cognitive ability and investor experience. We find that IQ and investor experience subsume all racial effects in the likelihood of 2004 market participation. Copyright Springer Science + Business Media, LLC 2012

Suggested Citation

  • Ajamu Loving & Michael Finke & John Salter, 2012. "Explaining the 2004 Decrease in Minority Stock Ownership," The Review of Black Political Economy, Springer;National Economic Association, vol. 39(4), pages 403-425, December.
    • Handle: RePEc:spr:blkpoe:v:39:y:2012:i:4:p:403-425
    DOI: 10.1007/s12114-012-9132-8
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    References listed on IDEAS

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    More about this item

    Keywords

    Wealth; Racial inequality; Black wealth; Minority stock ownership; G11;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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