On the Determinants of Portfolio Choice

B.P.M. Frijns; E. Koellen; T. Lehnert

doi:10.1016/j.jebo.2006.04.004

On the Determinants of Portfolio Choice

B.P.M. Frijns, E. Koellen, T. Lehnert^*

^*Corresponding author for this work

Finance

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

This paper jointly analyzes traditional and behavioral concepts in a simple experimental setting which allows for the assessment of the relative importance of each factor and their joint behavior. Various hypotheses are tested in three portfolio choice models. Markowitz [markowitz, h., 1952. Portfolio selection. Journal of finance 7, 77–92] findings are analyzed and extended by behavioral concepts and socio-demographic variables. Models are expressed as conjoint choice models represented by a multinomial logit model. Data is collected in an experimental setting. We show that the level of the risk-free rate, an individual's risk aversion, market sentiment, self-assessed financial expertise, age and gender are determining factors of portfolio choice.

Original language	English
Pages (from-to)	373-386
Number of pages	14
Journal	Journal of Economic Behavior & Organization
Volume	66
Issue number	2
DOIs	https://doi.org/10.1016/j.jebo.2006.04.004
Publication status	Published - 1 Jan 2008

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On the Determinants of Portfolio Choice

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