Marriage is a compromise - also for the share portfolio

Photo: Milaphotos

Many people probably feel their spouse could be better at making compromises. But research shows that married Danes in fact find common ground when investing in shares. A spouse's income and gender are both factors when it comes to investments.

- We see that men and women change behaviour in their investments when they are married. They seek to converge with their partner, so to speak, explains Jesper Rangvid, Professor at the Department of Finance at CBS.

In cooperation with Charlotte Christiansen, Professor at Aarhus University, and Juanna Schrøter Joensen, Assistant Professor at the Stockholm School of Economics, Jesper Rangvid has recently published an article in the academic journal Economic Inquiry.

Men take more gambles than women
The study's data is from the period 1997-2003 and is based on a randomly chosen group constituting ten percent of the Danish population.

The researchers behind the study have done several different research projects on the basis of the same data. The research project has been underway for several years and the publication in Economic Inquiry is more or less the last step for this project.

The researchers conclude in their article that married couples are generally more inclined to have shares. For example, 30 percent of married men have shares while only 20 percent of single men do. Men and women also behave differently when it comes to share investments.

Previous research has shown that single men are quite willing to take risks and often own more shares than the women. This analysis confirms that picture: In Denmark 18 percent of single women have shares compared to the 20 percent of single men who do. One of the main points of the article is that this behaviour changes when couples tie the knot.

- We see that when men marry, they start out with a larger shareholding which gets smaller - while the opposite is true for women. When couples divorce, the process is reversed. The men return to risky investments while women reduce their risk again, says Jesper Rangvid.

Seeking compromise
Another main point of the research article is that the effect of marriage on investments depends on the couple's income.

- Share investments generally depend on income, so people with high income are more likely to have shares than people with low income. The couple's income is therefore also significant when it comes to the effect on investment when they marry. Couples with very different incomes see a greater change in their shareholding when they marry, says Jesper Rangvid.

- The change is more significant for couples with very different income and less significant for couples with similar income. If the man and the woman have more or less the same income, investments do not change much when they are married. But if they have different incomes, quite a lot changes, explains Jesper Rangvid.

For more information please contact Jesper Rangvid