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The Diversity of Household Assets Holdings in the United States in 2007 and 2009: Measurement and Determinants

Author

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  • Sierminska, Eva

    (Luxembourg Institute of Socio-Economic Research (LISER))

  • Silber, Jacques

    (Bar-Ilan University)

Abstract

We apply diversity indices, such as the Gini-Simpson index and entropy related indices, to the study of the distribution of individual asset holdings in the United States in 2007 and 2009. We examine the impact of the 2008 recession on asset diversity and the way individual socio-economic characteristics as well as important life events affect this measure. The focus of our analysis is on financial assets. We use a unique panel data set that provides us with comprehensive household level data for 2007 and 2009 in the United States – the Survey of Consumer Finances. We find that asset diversity increases between 2007 and 2009. In addition, it increases with age, education and income and it is lower at the bottom of the wealth distribution. Life changing situations such as getting divorced or losing one's job have a statistically significant negative effect on a change in diversity, while getting married or having deteriorating health have a positive effect. Active money management also affects asset diversity positively.

Suggested Citation

  • Sierminska, Eva & Silber, Jacques, 2019. "The Diversity of Household Assets Holdings in the United States in 2007 and 2009: Measurement and Determinants," IZA Discussion Papers 12562, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12562
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    Cited by:

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    2. Caetano, Rafaela Vital & Marques, António Cardoso & Afonso, Tiago Lopes & Vieira, Isabel, 2023. "Could Private Investment in Energy Infrastructure soften the environmental impacts of Foreign Direct Investment? An assessment of developing countries," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 961-977.
    3. Dorothea Schäfer & Michael Stöckel & Henriette Weser, 2020. "Crisis Impact on the Diversity of Financial Portfolios: Evidence from European Citizens," Discussion Papers of DIW Berlin 1899, DIW Berlin, German Institute for Economic Research.
    4. Mesly, Olivier, 2023. "Irrational exuberance and deception — Why markets spin out of control," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).
    5. Schäfer, Dorothea & Stephan, Andreas & Weser, Henriette, 2023. "Crisis stress for the diversity of financial portfolios — evidence from European households," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 330-347.

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    More about this item

    Keywords

    diversity; Great Recession; financial assets; United States; wealth;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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