Proud to Not Own Stocks: How Identity Shapes Financial Decisions

Luca Henkel; Christian Pugnaghi-Zimpelmann

doi:10.1093/rfs/hhag034

Proud to Not Own Stocks: How Identity Shapes Financial Decisions

Luca Henkel¹; Christian Pugnaghi-Zimpelmann²

¹ Erasmus University Rotterdam, ERIM, CESifo, JILAEE, IZA@LISER, and Tinbergen Institute , · ² University of Hamburg and IZA@LISER ,

Review of Financial Studies 2026 open access

Abstract This paper introduces a key factor influencing households’ decision to invest in the stock market: how people view stockholders. Using surveys we conducted with nearly 8,500 individuals from 11 countries, we document that a large majority hold negative views of stockholders based on identity-relevant characteristics. Linking survey and administrative data, we find that negative perceptions strongly predict households’ stock market participation. We show that negative perceptions causally influence household decision-making and provide evidence supporting identity concerns as the underlying mechanism. Our findings provide new perspectives on the malleability of financial decision-making and a novel explanation for low stock market participation.

DOI: 10.1093/rfs/hhag034
Language: en
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