TY  - JOUR
AU  - Poterba, James M
AU  - Samwick, Andrew A
TI  - Household Portfolio Allocation Over the Life Cycle
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6185
PY  - 1997
Y2  - September 1997
DO  - 10.3386/w6185
UR  - http://www.nber.org/papers/w6185
L1  - http://www.nber.org/papers/w6185.pdf
N1  - Author contact info:
James M. Poterba
Department of Economics, E52-444
MIT
77 Massachusetts Avenue
Cambridge, MA 02139
Tel: 617/253-6673
Fax: 617/258-7804
E-Mail: poterba@nber.org

Andrew Samwick
6106 Rockefeller Hall
Department of Economics
Dartmouth College
Hanover, NH 03755-3514
Tel: 603/646-2893
Fax: 603/646-2122
E-Mail: andrew.samwick@dartmouth.edu
M1  - published as James M. Poterba, Andrew Samwick. "Household Portfolio Allocation over the Life Cycle," in Seiritsu Ogura, Toshiaki Tachibanaki and David A. Wise, editors, "Aging Issues in the United States and Japan" University of Chicago Press (2001)

AB  - In this paper, we analyze the relationship between age and portfolio structure for households in the US. We focus on both the probability that households of different ages own particular portfolio assets and the fraction of their net worth allocated to each asset category. We distinguish between age and cohort effects using data from the repeated cross-sections of the Federal Reserve Board's Surveys of Consumer Finances.  We present two broad conclusions.  First, there are important differences across asset classes in both the age-specific probabilities of asset ownership and in the portfolio shares of different assets at different ages. The notnion that all assets can be treated as identical from the standpoint of analyzing household wealth accumulation is not supported by the data.  Institutional factors, asset liquidity, and evolving investor tastes must be recognized in modeling asset demand. These factors could affect analyses of overall household saving as well as the composition of this saving. Second, there are evident differences in the asset ownership probabilities of different birth cohorts.  Currently, older households were more likely to hold corporate stock, and less likely to hold tax-exempt bonds, than younger households at any given age.  These differences across cohorts are important to recognize when analyzing asset accumulation profiles.
ER  -