Monday, Oct 6
Elisha Renne (Michigan)
Angela Fertig (Department of Health Policy and Management, College of Public Health, University of Georgia at Athens)
10/10/2011, at noon in room 6050 ISR-Thompson.
Close to 30 percent of the U.S. population experiences at least one mental or substance abuse disorder each year. Given the prevalence of mental health issues, this paper analyzes the role of mental health and cognitive functioning in household portfolio choice decisions. Generally, we find that households affected by mental health issues decrease investments in risky instruments. Various mental health issues can reduce the probability of holding risky assets by up to 15 percent. Moreover, single women diagnosed with psychological disorders increase investments in safe assets. Conversely, households headed by men with psychiatric problems decrease investments in safe assets. We also find that mental health issues are associated with an increase in financial assets devoted to retirement accounts, which tend to be less information-intensive. These findings suggest that mental health could affect households in a way that could have long-term consequences for wealth-building among those with mental illness.