The evolution of aggregate stock ownership : [Version December 2010]

Since World War II, direct stock ownership by households has largely been replaced by indirect stock ownership by financial institutions. We argue that tax policy is the driving force. Using long time-series from eight countries, we show that the fraction of household ownership decreases with measures of the tax benefits of holding stocks inside a pension plan. This finding is important for policy considerations on effective taxation and for financial economics research on the long-term effects of taxation on corporate finance and asset prices. JEL Classification: G10, G20, H22, H30 Keywords: Capital Gains Tax, Income Tax, Stock Ownership, Bond Ownership, Inflation, Bracket Creep, Pension Fund

The Evolution of Aggregate Stock Ownership - A Unified Explanation

Since World War II, direct stock ownership by households has largely been replaced by indirect stock ownership by financial institutions. We argue that tax policy is the driving force. Using long time-series from eight countries, we show that the fraction of household ownership decreases with measures of the tax benefits of holding stocks inside a pension plan. This finding is important for policy considerations on effctive taxation and for financial economics research on the long-term effects of taxation on corporate finance and asset prices.Capital gains tax; income tax; stock ownership; inflation; bracket creep; pension funds

Government Policy and Ownership of Financial Assets

Since World War II, direct stock ownership by households across the globe has largely been replaced by indirect stock ownership by financial institutions. We argue that tax policy is the driving force. Using long time-series from eight countries, we show that the fraction of household ownership decreases with measures of the tax benefits of holding stocks inside tax-deferred plans. This finding is important for policy considerations on effective taxation and for financial economics research on the long-term effects of taxation on corporate finance and asset prices.

Testing Efficiency in NHL Betting Markets

The efficiency of markets is a prominent topic in the field of finance. Market efficiency has been thoroughly examined across many subsectors of finance; however thus far, existing research has sparsely covered the increasingly prominent sports betting market. This market is currently valued at roughly $10B per year (Grandview). In this article, we evaluate the efficiency of sports betting markets, using NHL betting lines and results from 2015-2020 to create a multivariate probit model which tests the market’s efficiency. Using a multivariate probit model to identify NHL money line bets with a relatively high probability of success compared to their implied probability, we generate significant profit and beat betting markets, generating an 8.5% ROI when tested against the 20-21 NHL season

An Investigation of Personal Financial Literacy Education

A lack of financial literacy for many people in the United States is a prominent problem that has largely gone unaddressed, but one that can have devastating results. Currently, 43% of student loan borrowers are not making payments and 33% of American adults have $0 saved for retirement (Pascarella 2-4). These alarming statistics amid a strong economic environment highlight the negative affects a lack of financial literacy can have. Higher education at LMU is geared towards providing students an education of the whole person to enable them to become better people. This research investigates whether or not LMU prepares students to be financially literate. It seeks to bring attention to the current rates of financial literacy among LMU students across various majors and determine if there is a link between rates of financial literacy improvement and a student’s area of study over the four years of education. The results of the study indicate concerning levels of financial illiteracy across all areas and stages of study. Students studying finance exhibited the highest levels of financial literacy in both the beginning and ending years of study. There were significant positive changes across the four years of study in the College of Business Administration, but not for Non-CBA students. While LMU does not currently have a core personal finance component available to all students, this study indicates that the significant discrepancy in financial literacy change might be cause for further investigation into personal finance education for Non-CBA LMU students

Norwegian School of Economics and Business Administration, Shifting Capital Markets and Performance conference at Yale University, Texas Finance Festival

Abstract Since World War II, direct stock ownership by households has largely been replaced by indirect stock ownership by financial institutions which manage pensions. We argue that tax policy is the driving force. Using long time-series from eight countries, we show that the fraction of household ownership decreases with measures of the tax benefits of holding stocks inside a pension plan. This finding is important for policy considerations on effective taxation and for financial economics research on the long-term effects of taxation on corporate finance and asset prices

The Tax Benefit of Income Smoothing

A worker can contribute pre-tax dollars to a private pension plan. Under a progressive tax, this feature reduces income taxes. Ippolito (1986} argues that an individual in 1979 can reduce lifetime taxes by 20%. We re-examine his analysis using the complete time-series of US income tax history and find that the tax benefit of income smoothing is much smaller.income tax history; private pensions; tax progressivity