My name is Vicki Bogan. I'm an associate professor at the Dyson School in the SC Johnson College of Business at Cornell University.
I'm also the founder and director of Cornell's Institute for Behavioral and Household Finance.
Most of my research focuses on investment decision-making behavior.
I explore how behavioral biases and market frictions affect how people actually make financial decisions.
Mental health is increasingly becoming a significant issue for a large swath of the population.
Reports indicate that nearly one-fourth of the US population suffers from a mental health issue, and we know that this number has been increasing over the course of the COVID pandemic.
I have examined how mental health issues influence investment decisions from several angles, and discovered that mental health problems have significant and unexpected effects on financial decision-making.
Households affected by mental health issues have a lower probability of holding risky assets like stocks and mutual funds; individuals with depression and anxiety have a lower probability of holding voluntary retirement accounts, and individuals with depression and anxiety have a lower share of retirement savings as a proportion of total financial assets.
One of my newest working papers that I'm most excited about is a paper analyzing the effect of trauma on risk-taking behavior of mutual fund managers.
This is joint work with my Dyson finance colleague Scott Yonker.
In this paper, we look at trauma experiences due to being exposed to a mass shooting.
We investigate how this trauma exposure influences the investment decisions of professional mutual fund managers, and we find that exposure to mass shootings alters mutual fund managers' risk-taking decisions.
In particular, exposed mutual fund managers decrease their systematic risk by moving into stocks with lower exposures to market risk factors.
The effect that we document is temporary, lasting about one quarter before reverting to normal levels, and is strongest among managers with demographics previously shown to express greater fear from mass shootings, so, younger managers, less experienced managers.
This work, together with other literature showing that market downturns induce fear, suggests that fear could exacerbate variation in risk-taking, generating the highly volatile counter-cyclical risk premiums shown to exist in financial markets.
Two weeks ago, I testified in front of the US House of Representatives' Financial Services Committee on the gamification of investing.
My testimony was connected to some of my specific research on transaction costs influencing household investment behavior and my work in the area of behavioral finance.
Currently I'm the vice chair of the Academic Research Council for the Consumer Financial Protection Bureau, and one of the founding co-editors of Financial Planning Review, an academic journal devoted to publishing research that can inform the practice of financial planning.
Recently, my other co-editors and I wrote a paper entitled "Financial Planning: a research agenda for the next decade." It was a tremendous amount of fun to be able to think about the field in such a big-picture way.
Individuals deciding how to invest money, borrow money, and spend money have a powerful combined effect on global markets, and so what's most exciting about my current work is being able to make discoveries that can help us to better understand our economy. Also, it's very gratifying to know that my work could help people make better financial decisions.
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Dr. Vicki Bogan discusses her research into the influence of emotions on financial decision-making.