Income, trading, and performance: Evidence from retail investors

Dien Giau Bui, Iftekhar Hasan, Chih-Yung Lin*, Rui Xiang Zhai

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


We examine whether household income influences the trading styles of retail investors and their investment performance. To investigate this question, we use a unique dataset of branch-level trading that contains all retail investors and observe that those investors with high income trade more and earn significantly higher returns in the stock market. In addition, this income effect becomes stronger for highly risky stocks, such as gambling or lottery-like stocks. These findings are in line with the information model theorized by Peress (2004) in which wealthy investors take extra risks by trading more stocks.

Original languageEnglish
Pages (from-to)176-195
Number of pages20
JournalJournal of Empirical Finance
StatePublished - Mar 2022


  • Gambling stocks
  • Household income
  • Lottery-like stocks
  • Retail investor
  • Trading behavior


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