The diversity of household assets holdings in the United States in 2007 and 2009: measurement and determinants

Eva M. Sierminska; Jacques Silber

doi:10.1007/s11150-019-09472-z

The diversity of household assets holdings in the United States in 2007 and 2009: measurement and determinants

Eva M. Sierminska
, Jacques Silber

Department of Economics

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

7 Scopus citations

Abstract

We apply diversity indices, such as the Gini-Simpson index and entropy related indices, to the study of the distribution of individual asset holdings in the United States in 2007 and 2009. We examine the impact of the 2008 recession on asset diversity and the way individual socio-economic characteristics as well as important life events affect this measure. The focus of our analysis is on financial assets. We use a unique panel data set that provides us with comprehensive household level data for 2007 and 2009 in the United States—the Survey of Consumer Finances. We find that asset diversity increases between 2007 and 2009. In addition, it increases with age, education and income and it is lower at the bottom of the wealth distribution. Life changing situations such as getting divorced or losing one’s job have a statistically significant negative effect on a change in diversity, while getting married or having deteriorating health have a positive effect. Active money management also affects asset diversity positively.

Original language	English
Pages (from-to)	599-634
Number of pages	36
Journal	Review of Economics of the Household
Volume	18
Issue number	3
DOIs	https://doi.org/10.1007/s11150-019-09472-z
State	Published - 1 Sep 2020

Bibliographical note

Publisher Copyright:
© 2019, Springer Science+Business Media, LLC, part of Springer Nature.

Funding

The authors would like to thank Brian Bucks, Christos Koulovatianos and those who participated at the 2016 Workshop on Household Finance in Luxembourg for helpful suggestions and comments on a previous version of this paper. This paper was revised, while Sierminska was on sabbatical leave at the University of Arizona, Department of Economics, which she thanks for its hospitality. The authors thank also participants to the annual meeting of the Society of Economics of the Household (SEHO), Paris May 23–24, 2018, as well as three anonymous referees for their very useful comments.

Funders
Society of Economics

Keywords

Diversity
Financial assets
Great Recession
United States
Wealth

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10.1007/s11150-019-09472-z

Cite this

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abstract = "We apply diversity indices, such as the Gini-Simpson index and entropy related indices, to the study of the distribution of individual asset holdings in the United States in 2007 and 2009. We examine the impact of the 2008 recession on asset diversity and the way individual socio-economic characteristics as well as important life events affect this measure. The focus of our analysis is on financial assets. We use a unique panel data set that provides us with comprehensive household level data for 2007 and 2009 in the United States—the Survey of Consumer Finances. We find that asset diversity increases between 2007 and 2009. In addition, it increases with age, education and income and it is lower at the bottom of the wealth distribution. Life changing situations such as getting divorced or losing one{\textquoteright}s job have a statistically significant negative effect on a change in diversity, while getting married or having deteriorating health have a positive effect. Active money management also affects asset diversity positively.",

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The diversity of household assets holdings in the United States in 2007 and 2009: measurement and determinants

Abstract

Bibliographical note

Funding

Keywords

Access to Document

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