Portfolio choice for old age in Hungary

Abstract

THE AIMS OF THE PAPER

In this study I analyse the portfolio choice of the hungarian households after retirement. I seek to find out what preferences drive the portfolio choice in the 65-80 year old cohort, because the life-cycle theory of portfolio choice leads to ambiguous conclusions after retirement.

METHODOLOGY

To answer my research question I used an ordinal logistic regression model to analyse the portfolio choice over the life-cycle according to the education and the risk attitude of the respondents.

MOST IMPORTANT RESULTS, NEW FINDINGS

I found that after eliminating the impact of the education and the risk attitude mebers of the 65-80 year old cohort choose less risky portfolios with a higher probability than younger respondents. Furthermore, I showed that the proportion of the 65-80 year old cohort is significantly higher among those, who chose portfilios which do not include stocks.

EMPIRICAL IMPLICATIONS OF THE RESEARCH

The results highlight the preferences of the Hugarian households concerning the portfolio choice after retirement, thus it provide empirical proof which suplements the conclusions of the portfolio choice theory.