Racial/ethnic differences in high return investment ownership: A decomposition analysis

Sherman D. Hanna, Cong Wang, Yoonkyung Yuh

Research output: Contribution to journalArticlepeer-review

20 Scopus citations

Abstract

The racial/ethnic disparities of risky asset ownership were investigated. In the 2004 and 2007 Survey of Consumer Finances datasets, 30% of Hispanic, 36% of Black, and 65% of White households had high return investments such as stocks, investment real estate, or private business assets. Logistic analysis shows that Black and Hispanic households are much less likely to have high return assets, even after controlling for other factors such as education. However, Blinder-Oaxaca decomposition analyses show that if Black households had the same characteristics, including risk tolerance, as White households, they would have the same ownership rates for high return investments, and the gap between Hispanic and White households is much smaller than implied by standard logistic regression.

Original languageEnglish
Pages (from-to)44-59
Number of pages16
JournalJournal of Financial Counseling and Planning
Volume21
Issue number2
StatePublished - 2010

Keywords

  • Decomposition analysis
  • Individual investing
  • Portfolio allocation
  • Racial/ethnic differences
  • Survey of consumer finances

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