Briefing
How Couples Approach Portfolio Allocation
Abstract: The classical theory of household portfolio allocation finds that the share of household wealth invested in risky assets is independent of the level of household wealth. However, this prediction is at odds with empirical observations. This Economic Brief presents findings that reconcile the two. A model in which a household's portfolio allocation reflects the preferences of both spouses, adjusted for the bargaining power of each spouse, predicts that the wealthier a household becomes, the greater the share of its wealth will be invested in risky assets.
Keywords: portfolio allocation; households;
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https://www.richmondfed.org/-/media/richmondfedorg/publications/research/economic_brief/2017/pdf/eb_17-02.pdf
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Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2017
Issue: February