Presenter: Lakshmi Naaraayanan, London Business School

Title: Divine Catalysts: Religion and Portfolio Choices

Abstract: Does religion shape individual portfolio choices? To answer this question, we examine whether the same individual adjusts their equity portfolio on specific religious days, allowing us to isolate religion-driven investments. Using trading sessions held during a major festival promoting long-term prosperity which act as a cue, we find that individuals who associate with beliefs about the festival invest substantially more on these event days. They buy new stocks, hold them longer, and experience persistent increases in equity account size and diversification post-event. Event-driven purchases represent a larger financial commitment for lower-income individuals and smaller accounts, who subsequently benefit from increased equity exposure. Our findings suggest that religious cues can shape individual long-term investments and wealth accumulation.

Host: Antonia Grohmann

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