This paper examines the effect of behavior problems on credit card debt and student debt among young adults. The results show that behavior problems, in general, do not predict credit card ownership, intensive credit card use, student loans, and high level of indebtedness. Internalizing behavior problems are associated with a lower probability of having carryover balances and a drop in unsecured debt. Behavior problems are linked to a decrease in the probability of having student loans and a drop in the student loan balance. The results also show that when families have unsecured debt, the likelihood that their children as young adults use credit cards and the balance on these credit cards are higher.
This study investigates how genetics influence risk preferences and financial decisions. We expand on existing theoretical models to show that risk preferences that depend on genetic differences can explain non-expected utility maximizing behavior. We test these results using several waves of the Health and Retirement Study, which includes a rich set of information on households including biomarkers and genetic data for a large portion of the sample. We measure risk preferences using established methodologies (see Kimball et al. 2008) and create an alternative measure of risk preferences that incorporates polygenic scores estimated from the raw genetic data. We then estimate the effect of risk preferences using these alternative measures on risk-related household decisions such as insurance purchase decisions and retirement saving, and evaluate the relative contribution that risk preferences play in determining household financial well-being.
Over the past four decades, there has been a dramatic change in how mutual funds are sold to investors. Before 1980, mutual funds had a single share class which was offered to all investors (Reid and Rea, 2003). This study follows Barber et al. (2015) identifying the impact of distribution channels on fund flow. We contribute by providing additional evidence that shows the variation of fund flows within different share classes and distribution channels. Our results show that distribution channels impact fund flow. Based on these results, we argue that it is critical to account for the method of sales when analyzing fund the relationship between fund flow and performance.
Author(s): Philip Gibson, Yuanshan "Jimmy" Cheng, Tao Guo
This paper examines the performance of Real Estate Exchange Traded Funds (REETFs) over the period of time since their inception through September 2016. We construct equally-weighted portfolios monthly for comparison to the overall U.S. stock market as proxied by the Russell 3000 ETF (IWV). Our results show that over the entire time period the REETF portfolios experienced higher monthly returns, but also had a slightly higher standard deviation of returns. We also provide results controlling for risk differentials using the Sharp, Sortino, and Omega ratios. The results show that REETFs portfolios had higher risk-adjusted performance using all of the various measures.
This study investigates the hypothesis that financial literacy is affected by the overall natural cognitive decline with aging. The results of this research provide an empirical evidence supporting the hypothesis that suggests that financial literacy decline with aging using longitudinal data from Germany.
Although long-term care is a substantial risk that is threatening older Americans’ financial well-being, the demand for long-term-care insurance is not as strong as expected. The literature suggests that only 13 percent of the elderly above the age of 65 are insured against the possibility of going to a nursing home. This study examines the determinants of long-term-care insurance purchases. It is found that the probability of leaving bequests is related positively to obtaining long-term-care insurance. However, the number of children is associated negatively with purchasing long-term-care insurance.
