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Göteborgs universitets publikationer

The Birthplace Bias of Individual Investors

Författare och institution:
Ted Lindblom (Företagsekonomiska institutionen, Industriell och Finansiell ekonomi & logistik); Taylan Mavruk (Centrum för finans & Företagsekonomiska institutionen, Industriell och Finansiell ekonomi & logistik); Stefan Sjögren (Centrum för finans & Företagsekonomiska institutionen, Industriell och Finansiell ekonomi & logistik)
Publicerad i:
Institutional and Individual Investors: Saving for Old Age Conference, 22-23 June 2015, School of Management, University of Bath, UK,
Konferensbidrag - refereegranskat abstract
Sammanfattning (abstract):
We introduce the concepts of “birthplace bias” and “counterfactual bias” to examine individual investors’ bias towards their birthplace and to the new location after they move from their birthplace. We also measure the capital invested in the average portfolio of proximity biased investor. We find that the proximity bias phenomenon is largely an urban phenomenon. We also find that individuals who move to a new district tend to increase their local bias, in the new location, overtime while their birthplace bias remains more or less constant. None of the proximity biased portfolios earn abnormal returns. We partly explain this by the familiarity hypothesis, but we cannot rule out “overconfidence”. Moreover, we find that the average proximity biased portfolio does not underperform the market. Individual investors who face equal costs may simply prefer the familiar stocks. This implies “indisputable preference” among investors, which supports rationality of the average individual investor.
Ämne (baseras på Högskoleverkets indelning av forskningsämnen):
Ekonomi och näringsliv ->
Birthplace Bias, Local Bias, Individual Investors, Information Asymmetry
Postens nummer:
Posten skapad:
2015-08-24 12:20

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