Why do so few hold stocks : theory and evidence

This study develops a life-cycle model where investors make investment decisions in a realistic environment. Model results show that personal illiquid projects (housing and children), fixed costs (once-off/per-period participation costs plus variable/fixed transaction costs) and endogenous risky human capital (with permanent, transitory and disastrous shocks) together are able to address both the non-participation puzzle and the age-effects puzzle. Empirical implications of the model are examined using Heckman’s two-step method with the latest five Surveys of Consumer Finance (SCF). Regression results show that liquidity, informational cost and human capital are indeed the major determinants of participation and asset allocation decisions at different stages of an investor’s life.

A Method of Preparing Future Hourly Weather Data for the Study of Global Warming Impact on the Built Environment

The dynamic interaction between building systems and external climate is extremely complex, involving a large number of difficult-to-predict variables. In order to study the impact of global warming on the built environment, the use of building simulation techniques together with forecast weather data are often necessary. Since all building simulation programs require hourly meteorological input data for their thermal comfort and energy evaluation, the provision of suitable weather data becomes critical. Based on a review of the existing weather data generation models, this paper presents an effective method to generate approximate future hourly weather data suitable for the study of the impact of global warming. Depending on the level of information available for the prediction of future weather condition, it is shown that either the method of retaining to current level, constant offset method or diurnal modelling method may be used to generate the future hourly variation of an individual weather parameter. An example of the application of this method to the different global warming scenarios in Australia is presented. Since there is no reliable projection of possible change in air humidity, solar radiation or wind characters, as a first approximation, these parameters have been assumed to remain at the current level. A sensitivity test of their impact on the building energy performance shows that there is generally a good linear relationship between building cooling load and the changes of weather variables of solar radiation, relative humidity or wind speed.