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Contribution Details

Type Master's Thesis
Scope Discipline-based scholarship
Title The Effect of Loss Aversion, Ambiguity Aversion, and Risk Attitudes in Losses and Gains on Stock Market Participation
Organization Unit
  • Fabio Ferrara
  • Marc O Rieger
  • English
Institution University of Zurich
Faculty Faculty of Business, Economics and Informatics
Number of Pages 73
Date 2022
Abstract Text The objective of the master’s thesis at hand is to contribute to the empirical literature on the stock market participation puzzle. Based on a data set consisting of Preferences, Attitudes, Norms, and Decisions in Asia(PANDA), the impact of risk preferences such as loss aversion, ambiguity aversion, and attitudes in losses and gains on stock market participation is captured. Among the utilized methodologies are OLS, probit, and ordered probit regression analysis, which depend on the type of the four outcome variables as approximations for stock market participation. The results show that risk preferences tend not to play a crucial role in explaining the stock market participation puzzle. Instead, established factors in the literature such as country dummies, gender, the field of study, and financial literacy might be more important in explaining the phenomenon. However, the results must be interpreted cautiously since the investigation features certain limitations.
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