Journal of Financial Economics Vol. 29 No. 1 1991

The consumption of stockholders and nonstockholders

N. Gregory Mankiw^1,2,3,4; Stephen P. Zeldes^1,3,4

¹ National Bureau of Economic Research · ² Harvard University · ³ Harvard University Press · ⁴ University of Pennsylvania

Abstract

Only one-fourth of U.S. families own stock. This paper examines whether the consumption of stockholders differs from the consumption of nonstockholders and, if so, whether these differences help explain the empirical failures of the consumption-based CAPM. Household panel data are used to construct time series on the consumption of each group. The results indicate that the consumption of stockholders is more volatile and more highly correlated with the excess return on the stock market. These differences help explain the size of the equity premium, although they do not fully resolve the equity premium puzzle.

DOI

10.1016/0304-405x(91)90015-c

Volume

29

Issue

1

Pages

97-112

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓