Veranstaltungen des DIW Berlin/
Events of DIW Berlin

15 May 2019

DIW Seminar on Macroeconomics and Financial Markets Ambiguity Attitudes about investments: Evidence from the field

Using an incentivized survey and a representative sample of investors, we elicit ambiguity attitudes toward a familiar company stock, a local stock index, a foreign stock index, and a crypto currency. We separately estimate ambiguity aversion (ambiguity preferences) and perceived ambiguity levels (perceptions about ambiguity), while controlling for unknown likelihood beliefs. We show that ambiguity aversion is highly correlated across different assets and can be summarized by a single underlying factor. By contrast, individuals’ perceived ambiguity levels differ depending on the type of asset and cannot be summarized by a single underlying factor. Perceived ambiguity is mitigated by financial literacy and education, while the preference component is correlated with risk aversion. Perceived ambiguity proves to be related to actual investment choices, validating our measure. Finally, our results imply that policies enhancing financial literacy and knowledge of financial markets can help stimulate equity market participation and reduce inequality, as these reduce peoples’ perceived levels of ambiguity about financial assets.

More Information
Speaker
  • Roy Kouwenberg, Mahidol University, Bangkok

  • Time
    12:00-13:15
    Location
    Joan Robinson Room DIW Berlin Room 3.3.002a Mohrenstraße 58 10117 Berlin
    Contact(s)
    at DIW Berlin
    Tel.: +49 30 89789 486