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Are High Income Individuals Better Stock Market Investors?

Author

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  • Martin Feldstein
  • Shlomo Yitzhaki

Abstract

This paper presents evidence that the corporate stock owned by high income investors appreciates substantially faster than the stock owned by investors with lower incomes. Those with very high incomes enjoy the greatest success on their investments while those with incomes under $20,000 have the least success. The evidence indicates that the differences are large and that they have persisted for a long time.

Suggested Citation

  • Martin Feldstein & Shlomo Yitzhaki, 1982. "Are High Income Individuals Better Stock Market Investors?," NBER Working Papers 0948, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0948
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    File URL: http://www.nber.org/papers/w0948.pdf
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    References listed on IDEAS

    as
    1. Feldstein, Martin & Yitzhaki, Shlomo, 1978. "The effects of the capital gains tax on the selling and switching of common stock," Journal of Public Economics, Elsevier, vol. 9(1), pages 17-36, February.
    2. Martin Feldstein & Joel Slemrod & Shlomo Yitzhaki, 1980. "The Effects of Taxation on the Selling of Corporate Stock and the Realization of Capital Gains," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 777-791.
    3. Yitzhaki, Shlomo, 1979. "An Empirical Test of the Lock-in Effect of the Capital Gains Tax," The Review of Economics and Statistics, MIT Press, vol. 61(4), pages 626-629, November.
    4. Burton G. Malkiel & John G. Cragg, 1980. "Expectations and the Valuation of Shares," NBER Working Papers 0471, National Bureau of Economic Research, Inc.
    5. Joel Slemrod, 1978. "The Lock-In Effect of the Capital Gains Tax: Some Time Series Evidence," NBER Working Papers 0257, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Emmanuel Saez & Gabriel Zucman, 2014. "Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," NBER Working Papers 20625, National Bureau of Economic Research, Inc.
    2. Edward N. Wolff, 2014. "Household Wealth Trends in the United States, 1962-2013: What Happened over the Great Recession?," NBER Working Papers 20733, National Bureau of Economic Research, Inc.
    3. Edward N. Wolff, 2017. "Household Wealth Trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered?," NBER Working Papers 24085, National Bureau of Economic Research, Inc.
    4. Aman Srivastava, 2006. "An Analysis And Measurement Of Confidence Of Stock Investors In India," International Journal of Theoretical and Applied Finance (IJTAF), World Scientific Publishing Co. Pte. Ltd., vol. 9(05), pages 747-775.
    5. Edward N. Wolff, 2021. "The declining wealth of the middle class, 1983–2016," Contemporary Economic Policy, Western Economic Association International, vol. 39(3), pages 461-478, July.

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