Congratulations to Tobin Hanspal! His paper “Consuming Dividends” has been accepted for publication by the "Review of Financial Studies" and his paper "The Characteristics and Portfolio Behavior of Bitcoin Investors: Evidence from Indirect Cryptocurrency Investments" by the "Review of Finance".

Consuming Dividends
Co-Authors: Konstantin Bräuer (Goethe-Universität Frankfurt) and Andreas Hackethal (Goethe-Universität Frankfurt)

Abstract: This paper studies why investors buy dividend-paying assets and how they time consumption accordingly. We combine administrative bank data linking customers’ consumption and income to portfolio data and survey responses on financial behavior. We find that private consumption is excessively sensitive to dividend income. Investors across wealth, income, and age distributions increase spending precisely around days of dividend receipt. Our results are at odds with a number of existing rational and behavioral explanations such as financial constraints and impulsiveness. Instead, consumption responses reflect ‘planned’ excess sensitivity, driven by investors who select dividend portfolios, anticipate dividend income, and plan consumption accordingly.

The Characteristics and Portfolio Behavior of Bitcoin Investors: Evidence from Indirect Cryptocurrency Investments

Co-Authors: Andreas Hackethal (Goethe-Universität Frankfurt), Dominique M. Lammer, and Kevin Rink (Goethe-Universität Frankfurt)

Abstract: Cryptocurrencies have received growing attention from individuals, the media, and regulators. However, little is known about the investors whom these financial instruments attract. Using administrative data, we describe the investment behavior of individuals who invest in cryptocurrencies with structured retail products. We find that cryptocurrency investors are active traders who are prone to investment biases and hold risky portfolios. Cryptocurrency investors are more likely to invest in stocks with high media sentiment and more likely to employ heuristics from technical analysis. In line with attention effects and anticipatory utility, we find that the average cryptocurrency investor substantially increases account logins and trading activity after his or her first cryptocurrency purchase. Furthermore, cryptocurrency investors tend to tilt their portfolios towards even more risky securities after cryptocurrency adoption. Our results document which investors are more likely to adopt new financial products and help inform regulators about investors’ vulnerability to cryptocurrency investments.