Asset Ownership Across Generations

This paper examines cross-generational connections in asset ownership. We study the effect that parental ownership of individual assets has on their children's knowledge about assets and their portfolio choice decisions. The paper first presents a theoretical framework that develops the distinction between the intergenerational transfer of knowledge about financial assets and the direct transfer of dollars. It subsequently analyzes data from the Panel Study of Income Dynamics (PSID). Our empirical research reveals that there is intergenerational correlation in asset ownership and that parental asset-ownership affects the probability of holding a bank account and the probability of owning stock.