Income, trading, and performance: Evidence from retail investors

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

doi:10.1016/j.jempfin.2022.01.006

Income, trading, and performance: Evidence from retail investors

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

^*此作品的通信作者

資訊管理與財務金融學系

研究成果: Article › 同行評審

5 引文斯高帕斯（Scopus）

摘要

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.

原文	English
頁（從 - 到）	176-195
頁數	20
期刊	Journal of Empirical Finance
卷	66
DOIs	https://doi.org/10.1016/j.jempfin.2022.01.006
出版狀態	Published - 3月 2022

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10.1016/j.jempfin.2022.01.006

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title = "Income, trading, and performance: Evidence from retail investors",

abstract = "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.",

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T2 - Evidence from retail investors

AU - Bui, Dien Giau

AU - Hasan, Iftekhar

AU - Lin, Chih-Yung

AU - Zhai, Rui Xiang

PY - 2022/3

Y1 - 2022/3

N2 - 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.

AB - 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.

KW - Gambling stocks

KW - Household income

KW - Lottery-like stocks

KW - Retail investor

KW - Trading behavior

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VL - 66

SP - 176

EP - 195

JO - Journal of Empirical Finance

JF - Journal of Empirical Finance

ER -

Income, trading, and performance: Evidence from retail investors

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