Investment Decisions and Offspring Gender

Economic research has documented many economic affects of offspring gender on parental behavior. However, an open question exists as to whether offspring gender has any influence on parental investment decision making. Specifically, I investigate whether female offspring have an impact on investment decisions with respect to stock and bondholding. Using a panel data set, I find that for male respondents, having only female offspring increases the probability of stockholding by over 17%. In contrast, a relationship between stockholding and offspring gender was not at all present for female respondents.Financial Economics, G11, D14,

Microfinance Institutions: Does Capital Structure Matter?

Microfinance Institutions (MFIs) have risen to the forefront as invaluable institutions in the development process. Nevertheless, capital constraints have hindered the expansion of microfinance programs such that the demand for financial services still far exceeds the currently available supply. Moreover, it is observed that microfinance organizations have had various degrees of sustainability. Thus, the question of how best to fund these programs is a key issue. Recognizing the potential of microfinance in the development process, this paper examines the existing sources of funding for MFIs by geographic region, and explores how changes in capital structure could facilitate future growth and improve the efficiency and financial sustainability of MFIs. Using panel data, I establish a link between capital structure and key measures of MFI success. Notably, I find causal evidence supporting the assertion that an increased use of grants by MFIs decreases operational self-sufficiency.Microfinance Institutions, capital structure, Financial Economics, F3, G21, G32, O1,

Post-Recession Financial Strategies for Households: How to Deal with Debt

CaRDI Research & Policy Brief Issue 7

Bubbles or Convenience Yields? A Theoretical Explanation with Evidence from Technology Company Equity Carve-Outs

WP 2006-11 May 2006JEL Classification Codes: G10; G12; D50This paper offers an alternative explanation for what is typically referred to as an asset pricing bubble. We develop a model that formalizes the Cochrane (2002) convenience yield theory of technology company stocks to explain why a rational agent would buy an “overpriced” security. Agents have a desire to trade but short-sale restrictions and other frictions limit their trading strategies and enable prices of two similar securities to be different. Thus, divergent prices for similar securities can be sustained in a rational expectations equilibrium. The paper also provides empirical support for the model using a sample of 1996 - 2000 equity carve-outs

How high is too high? Soaring Interest Rates and the Elasticity of Demand for Microcredit

How high is too high? Soaring Interest Rates and the Elasticity of Demand for MicrocreditFinancial Economics,

Team Gender Diversity and Investment Decision Making Behavior

We investigate whether the gender composition of a fund management team influences investment decision making behavior. Using an experimental economics approach, we examine the relationship between gender diversity and investment decisions. We find evidence that a male presence increases the probability of selecting a higher risk investment. However, the all male teams are not the most risk seeking. Moreover, having a male presence can increase loss aversion. In the context of workforce composition, these results could have important implications for team investment decisions driven by the assessment of risk and return trade-offs. (JEL: G11

Are Higher 529 College Savings Plan Fees Linked to Greater State Tax Incentives?

WP 2008-10 April 2008JEL Classification Codes: G10; G11; H24; I22Despite the fact that 529 College Savings Plans have existed for over a decade, there has been limited scholarly attention on investment questions related to this savings vehicle. In some of the first academic literature on this topic, Alexander and Luna (Supplement 2005) identified a surprising relationship between 529 College Savings Plan participation and plan fees. They found a positive relationship between participation rates and fees. While they link this counterintuitive result to plan marketing efforts by brokers, I propose an alternative view. In my data which covers a five year time span, I find no significant relationship between participation rates and fees. However, when investigating the tax incidence with respect to 529 plans, I find a positive relationship between state tax rates and 529 plan fees. This suggests that investment companies could be opportunistically setting fees to usurp the benefits which state governments intended for investors. Since state tax incentives are designed to induce participation and plan fees (by design) are correlated with these incentives, the positive link between plan fees and participation becomes less of a puzzle

Stock Market Participation and the Internet

WP 2006-10 May 2006JEL Classification Codes: D14; G10Theory indicates that frictions (e.g., information and transaction costs) could account for the lower than expected stock market participation rates. This paper examines the hypothesis that there has been a fundamental change in participation and links this change to the reduction of these frictions by the advent of the Internet. Using panel data on household participation rates over the past decade, the results show computer/Internet using households raised participation substantially more than non-computer using households. The increased probability of participation was equivalent to having over $27,000 in additional household income or over 2.5 more mean years of education

Investment Decisions and Offspring Gender

WP 2009-08 January 2009JEL Classification Codes: G11; D14Economic research has documented many economic affects of offspring gender on parental behavior. However, an open question exists as to whether offspring gender has any influence on parental investment decision making. Specifically, I investigate whether female offspring have an impact on investment decisions with respect to stock and bondholding. Using a panel data set, I find that for male respondents, having only female offspring increases the probability of stockholding by over 17%. In contrast, a relationship between stockholding and offspring gender was not at all present for female respondents