Portfolio Allocation, Risk Aversion, and Digital Literacy Among the European Elderly

This study contributes to the literature on portfolio choices of elder persons by examining the influence of digital literacy on the propensity to own risky assets, when considering individual- and country-level variables. Our empirical analysis is based on data from Survey of Health, Ageing and Retirement in Europe and a set of macroeconomic indicators retrieved from international databases. To capture the impact of individual- and country-level factors, we have utilized multilevel models with a two-level sampling design. The results obtained provide evidence for a positive relationship between individual- and country-level digital literacy and portfolio riskiness, as well as heterogeneity in the portfolio choices of older individuals across the European Union (EU) countries. In addition, age is found to influence differently the portfolio riskiness of elder persons across the EU countries. Bridging the digital divide may provide access to balanced-risk portfolios for elderly persons.