Journal of Family and Economic Issues

, Volume 27, Issue 4, pp 601–625

Determinants of Portfolio Efficiency Losses in US Self-directed Pension Accounts

Authors

    • Department of FinanceYuan-Ze University
Article

DOI: 10.1007/s10834-006-9033-8

Cite this article as:
Lai, C.W. J Fam Econ Iss (2006) 27: 601. doi:10.1007/s10834-006-9033-8

Abstract

This empirical study evaluates the magnitude of efficiency losses of household portfolio choices in self-directed pension accounts (SDAs). It uses data from the Survey of Consumer Finances (SCF). The determinants of the magnitude of efficiency losses across household investors are investigated in detail. The findings of this study lend empirical support to the belief that the magnitude of efficiency losses for household investors differs with the different demographic characteristics and investment propensities. In particular, household investors with long-investment horizons, with more autonomy of choices in their SDAs, or with the tendency to select high levels of portfolio risk in SDAs are more vulnerable to efficiency losses. Factors to predict the levels of portfolio risk maintained by household investors in their SDAs are also explored.

Keywords

Defined contribution planEfficiency lossesPortfolio choice

Copyright information

© Springer Science+Business Media, Inc. 2006