Racial/Ethnic Differences in High Return Investment Ownership

Personal Finance, Military Families February 07, 2017 Print Friendly and PDF

 

Hanna, S. D., Wang, C. & Yuh, Y. (2010). Racial/ethnic differences in high return investment ownership: A decomposition analysis. Journal of Financial Counseling and Planning Education, 21 (2), pp. 44-59.

Brief Description:  Research on ownership of high risk/high return assets shows that Black and Hispanic households are much less likely to own them than are White households, even after education is taken into account. This study uses a decomposition strategy to examine how minority households would invest if they had similar demographic and economics characteristics to those of Whites. Results indicate that virtually all of the difference between Black and White households and about 90 percent of the difference between Hispanic and White households in ownership of high return investments can be explained by these household characteristics.

Implications:  Improving household economic characteristics of minority households will do much to increase their likelihood of investing in high return investments. However, risk tolerance also plays a role in saving and investment decisions. Education aimed at increasing the investment risk tolerance of minority households could also lead to increased ownership of investments that have higher risks and returns.

Connect with us

  • Twitter
  • Facebook
  • YouTube
  • Pinterest

Welcome

This is where you can find research-based information from America's land-grant universities enabled by eXtension.org

LOCATE

USDA / NIFA

This work is supported by the USDA National Institute of Food and Agriculture, New Technologies for Ag Extension project.