Religious beliefs, gambling attitudes, and financial market outcomes

Alok Kumar, Jeremy K. Page, Oliver G. Spalt

Research output: Contribution to journalArticle

151 Citations (Scopus)

Abstract

This study investigates whether geographic variation in religion-induced gambling norms affects aggregate market outcomes. We conjecture that gambling propensity would be stronger in regions with higher concentrations of Catholics relative to Protestants. Consistent with our conjecture, we show that in regions with higher Catholic-Protestant ratios, investors exhibit a stronger propensity to hold lottery-type stocks, broad-based employee stock option plans are more popular, the initial day return following an initial public offering is higher, and the magnitude of the negative lottery-stock premium is larger. Collectively, these results indicate that religion-induced gambling attitudes impact investors' portfolio choices, corporate decisions, and stock returns.

Original languageEnglish (US)
Pages (from-to)671-708
Number of pages38
JournalJournal of Financial Economics
Volume102
Issue number3
DOIs
StatePublished - Dec 2011

Fingerprint

Gambling
Financial markets
Propensity
Lottery
Investors
Portfolio choice
Employee stock options
Initial public offerings
Stock returns
Premium

Keywords

  • Employee stock option plans
  • Gambling
  • Institutional investors
  • IPOs
  • Religion

ASJC Scopus subject areas

  • Accounting
  • Strategy and Management
  • Economics and Econometrics
  • Finance

Cite this

Religious beliefs, gambling attitudes, and financial market outcomes. / Kumar, Alok; Page, Jeremy K.; Spalt, Oliver G.

In: Journal of Financial Economics, Vol. 102, No. 3, 12.2011, p. 671-708.

Research output: Contribution to journalArticle

Kumar, Alok ; Page, Jeremy K. ; Spalt, Oliver G. / Religious beliefs, gambling attitudes, and financial market outcomes. In: Journal of Financial Economics. 2011 ; Vol. 102, No. 3. pp. 671-708.
@article{f329e2bb08744f4ea7f2fefe3d75f968,
title = "Religious beliefs, gambling attitudes, and financial market outcomes",
abstract = "This study investigates whether geographic variation in religion-induced gambling norms affects aggregate market outcomes. We conjecture that gambling propensity would be stronger in regions with higher concentrations of Catholics relative to Protestants. Consistent with our conjecture, we show that in regions with higher Catholic-Protestant ratios, investors exhibit a stronger propensity to hold lottery-type stocks, broad-based employee stock option plans are more popular, the initial day return following an initial public offering is higher, and the magnitude of the negative lottery-stock premium is larger. Collectively, these results indicate that religion-induced gambling attitudes impact investors' portfolio choices, corporate decisions, and stock returns.",
keywords = "Employee stock option plans, Gambling, Institutional investors, IPOs, Religion",
author = "Alok Kumar and Page, {Jeremy K.} and Spalt, {Oliver G.}",
year = "2011",
month = "12",
doi = "10.1016/j.jfineco.2011.07.001",
language = "English (US)",
volume = "102",
pages = "671--708",
journal = "Journal of Financial Economics",
issn = "0304-405X",
publisher = "Elsevier",
number = "3",

}

TY - JOUR

T1 - Religious beliefs, gambling attitudes, and financial market outcomes

AU - Kumar, Alok

AU - Page, Jeremy K.

AU - Spalt, Oliver G.

PY - 2011/12

Y1 - 2011/12

N2 - This study investigates whether geographic variation in religion-induced gambling norms affects aggregate market outcomes. We conjecture that gambling propensity would be stronger in regions with higher concentrations of Catholics relative to Protestants. Consistent with our conjecture, we show that in regions with higher Catholic-Protestant ratios, investors exhibit a stronger propensity to hold lottery-type stocks, broad-based employee stock option plans are more popular, the initial day return following an initial public offering is higher, and the magnitude of the negative lottery-stock premium is larger. Collectively, these results indicate that religion-induced gambling attitudes impact investors' portfolio choices, corporate decisions, and stock returns.

AB - This study investigates whether geographic variation in religion-induced gambling norms affects aggregate market outcomes. We conjecture that gambling propensity would be stronger in regions with higher concentrations of Catholics relative to Protestants. Consistent with our conjecture, we show that in regions with higher Catholic-Protestant ratios, investors exhibit a stronger propensity to hold lottery-type stocks, broad-based employee stock option plans are more popular, the initial day return following an initial public offering is higher, and the magnitude of the negative lottery-stock premium is larger. Collectively, these results indicate that religion-induced gambling attitudes impact investors' portfolio choices, corporate decisions, and stock returns.

KW - Employee stock option plans

KW - Gambling

KW - Institutional investors

KW - IPOs

KW - Religion

UR - http://www.scopus.com/inward/record.url?scp=82455164326&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=82455164326&partnerID=8YFLogxK

U2 - 10.1016/j.jfineco.2011.07.001

DO - 10.1016/j.jfineco.2011.07.001

M3 - Article

AN - SCOPUS:82455164326

VL - 102

SP - 671

EP - 708

JO - Journal of Financial Economics

JF - Journal of Financial Economics

SN - 0304-405X

IS - 3

ER -