Does Financial Market Participation Increase Households’ Well-being? Insight on households’ saving habits and financial investment choices

Details

Supervisors

Panin, Amma

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation économétrie, à finalité approfondie

Abstract

enFinancial market participation helps households to secure and control their future financial situation. This study empirically tested whether financial market participation improves household well-being, using Dutch DNB micro-household survey panel data from five survey waves (2020-2024). Fixed-effects and between-effects panel regression models are adopted to distinguish within-individual and across-individual variations over time. Results indicate a modest, statistically significant negative relationship between financial market participation and happiness, which serves as a proxy for subjective well-being. This relationship was found robust to alternative measures, such as assets from investments and their share in the asset portfolio. Findings suggest financial market participation does not enhance subjective well-being and, in the context of the Dutch population, may be associated with a slight decline in reported overall happiness. Employment status, owning real estate, higher health conditions, marriage status and perceived financial household status show significant and high positive effects on happiness.