Abstract
This paper analyses the impact of mental health problems on the elderly households' decision to invest in risky financial assets. We use data from the Survey of Health, Ageing and Retirement in Europe (SHARE) to look at the association between depression and the holding of risky assets. The results show that suffering symptoms of depression lowers the probability of acquiring risky financial assets, such as stocks and shares. We argue that disparities in cognition, life expectancy and perception may explain these systematic differences between the depressed and the non-depressed. We provide evidence that disparities in perception are the most plausible mechanism behind this association.
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