Lühikokkuvõte: We study how individuals working in the finance industry affect the financial decisions of their social connections. Comprehensive register data allow us to track transitions into a finance role and to relate these transitions to the individual’s family members’ participation in financial markets. An identification strategy utilizing within-individual variation reveals a strong positive effect of a finance professional on the participation of her family members. This effect is larger for individuals who do not participate in financial markets, for low-income and low-education individuals, for riskier asset classes, and it declines in social distance. The finance professionals do not contribute to their family members’ portfolios beyond financial market entries, neither do they contribute to lower investment costs, nor to higher returns. These results are consistent with the finance professionals playing the role of a money doctor in their family.
Võtmesõnad: Social interaction, peer effects, financial advice, money doctors

Kaasautorid:

Samuli Knüpfer (Aalto University School of Business, BI Norwegian Business School, and IFN)
Theresa Spickers (University of Amsterdam)

The public research seminars of the Department of Economics and Finance (DEF) at Tallinn University of Technology  usually take place on the second and fourth Wednesdays of the month in both onsite and online format, unless announced otherwise. The presentation will last approximately 45 minutes followed by 15 minutes of discussion. The seminars are held in English. Copies of the paper are usually made available at the seminar. The DEF seminar series is organised in collaboration with the project ”Individual Behaviour and Economic  Performance: Methodological  Challenges and Institutional Context” (IBEP), which has received funding from the European Union’s Horizon 2020 Research and Innovation programme under Grant Agreement No 952574. Questions about the seminar can be sent to the IBEP seminar coordinator Kadri Männasoo, kadri.mannasoo@taltech.ee.