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Religious‐based portfolio selection

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  • Jin‐Ray Lu
  • Chih‐Ming Chan

Abstract

We examine religious attendance and portfolio selection decisions for an individual with religious beliefs within a continuous‐time framework. Our findings are three‐fold. First, religious contributions increase with wealth capital, the degree of religious devotion, and an increase in the wage level. Second, religious attendance positively relates to wealth capital and the performance of stock investments, but negatively correlates with wage return rates. Third, participation in religious activities can result in declining demand for risky asset investments. Theoretically, this study explains how individuals’ portfolio choices correlate with their religious activities.

Suggested Citation

  • Jin‐Ray Lu & Chih‐Ming Chan, 2012. "Religious‐based portfolio selection," Review of Financial Economics, John Wiley & Sons, vol. 21(1), pages 31-38, January.
    • Handle: RePEc:wly:revfec:v:21:y:2012:i:1:p:31-38
    DOI: 10.1016/j.rfe.2011.12.004
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    References listed on IDEAS

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    Cited by:

    1. Apergis, Nicholas, 2023. "Religion groups and portfolio choice decisions: Evidence from UK households," Finance Research Letters, Elsevier, vol. 54(C).

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