Analysis of deviance in household financial portfolio choice: evidence from Spain

We analyze empirically the household financial portfolio allocation decision using a variance decomposition technique that takes into account the constrained, non-normal nature of household portfolio allocation observations. We apply the technique to a relatively wide collection of financial assets. Results show that the main factors underlying household financial portfolio choice in Spain are age and net wealth. Among others, there is also evidence of sizeable risk aversion, education, and income effects, but very modest effects are associated to family size and having accounts in stand-alone Internet banks. Implications for policy are also derived.