National Culture and Household Finance

Global Economy and Finance Journal 5, 37-52, 2012

16 Pages Posted: 13 Aug 2009 Last revised: 23 Oct 2013

See all articles by Wolfgang Breuer

Wolfgang Breuer

RWTH Aachen University

Astrid Juliane Salzmann

Catholic University of Lille - IESEG School of Management; RWTH Aachen University - Department of Finance

Date Written: August 13, 2009

Abstract

In a series of cross-country comparisons, we show that national culture has a considerable impact on the characteristics of household finance. Using the Schwartz cultural value model and data on household finance, we analyze the impact of national culture on the use of deposits, equities, debt securities, life insurance, and pension funds in household portfolios. National culture is a strong indicator for the portfolio structure: Egalitarianism versus Hierarchy is negatively related to the use of deposits, Autonomy versus Embeddedness is negatively related to the use of debt securities and positively related to the use of life insurance and pension funds. The findings suggest several implications for the field of household financial engineering, as for household investments additional features of welfare seem to matter beyond expected return and return variance.

Keywords: national culture, household finance, portfolio choice, saving behavior, consumption

JEL Classification: A13, D14, G11, Z13

Suggested Citation

Breuer, Wolfgang and Salzmann, Astrid Juliane, National Culture and Household Finance (August 13, 2009). Global Economy and Finance Journal 5, 37-52, 2012 , Available at SSRN: https://ssrn.com/abstract=1448698 or http://dx.doi.org/10.2139/ssrn.1448698

Wolfgang Breuer

RWTH Aachen University ( email )

Templergraben 55
D-52056 Aachen, 52056
Germany

Astrid Juliane Salzmann (Contact Author)

Catholic University of Lille - IESEG School of Management ( email )

Socle de la Grande Arche
1 Parvis de la Defense
Puteaux, Paris 92800
France

RWTH Aachen University - Department of Finance ( email )

Templergraben 64
Aachen, 52056
Germany

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