The relationship between financial asset returns and the well-being of US households

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Abstract

This note considers the effect of changes on the well-being of US residents owing to changes in the value of various financial assets. Ordinary least squares estimates reveal that equity market returns have a significant and asymmetric, impact on the well-being. This result is likely the result of a wealth effect whereby rising (falling) stock markets increase (decrease) the ability to meet basic needs and this contributes to a shifting assessment of life-situation and overall well-being.

Original languageEnglish
Pages (from-to)1184-1188
Number of pages5
JournalApplied Economics Letters
Volume21
Issue number17
DOIs
Publication statusPublished - 1 Jan 2014
Externally publishedYes

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