title: Life insurance investment and stock market participation in Europe.
abstract: In most European countries life insurance has played a key role in household portfolios, to the extent that it has often been the first asset ever purchased. In this paper we use life history data from a host of European countries to investigate the role of life insurance investment in shaping individuals' attitudes towards participation in stocks and mutual funds. We show that individuals who purchased a life insurance policy are more likely to invest in stocks and mutual funds later. On the one hand, these findings support the notion that life insurance policies play an educational role in financial investment. On the other hand, they are also consistent with behavioural models where economic agents are first concerned with avoiding unacceptable adverse scenarios by purchasing low risk investments, such as life insurance policies, and then invest in riskier assets, such as stocks and mutual funds, to obtain higher economic returns.
authors.affiliation: Department of Economics, Ca' Foscari University of Venice, Fondamenta San Giobbe, Cannaregio 873, 30121 Venezia, Italy. Electronic address: danilo.cavapozzi@unive.it.
authors.forename: Danilo
authors.initials: D
authors.lastname: Cavapozzi
authors.affiliation: Department of Economics and Management, University of Padua, Via del Santo 33, 35123 Padova, Italy. Electronic address: elisabetta.trevisan@unipd.it.
authors.forename: Elisabetta
authors.initials: E
authors.lastname: Trevisan
authors.affiliation: Department of Economics and Management, University of Padua, Via del Santo 33, 35123 Padova, Italy. Electronic address: guglielmo.weber@unipd.it.
authors.forename: Guglielmo
authors.initials: G
authors.lastname: Weber
mesh_terms: D005060:Europe; D006306:Health Surveys; D006801:Humans; D007352:Insurance, Life / Q000706:statistics & numerical data*; D007449:Investments / Q000706:statistics & numerical data*; D015233:Models, Statistical; D012179:Retirement / Q000191:economics; D012306:Risk; D012959:Socioeconomic Factors