Assistant Professor of Finance and Economics, Columbia Business School
Enrichetta Ravina is Assistant Professor of Finance and Economics at Columbia Business School. Her research interests include Behavioral Finance, Consumption and Credit Markets, Private Wealth Management, and Corporate Finance. Professor Ravina’s current research examines individual portfolio and investment decisions in 401(k) plans, their determinants and the way they are affected by government policy, firm characteristics and individual demographics. Her work also covers the financial decisions of high net worth U.S. households and their interactions with their wealth managers; investors’ preferences and decision making; the consumption, borrowing decisions, credit card usage, and stock market investments of U.S. households; and the effect of appearance, persuasion and personal characteristics on the terms of financial transactions. She received a Ph.D. in Economics from Northwestern University and B.A. in Economics and Business from University of Torino.
We examine the international equity allocations of 3.8 million individuals in 296 401(k) plans over the 2005-2011 period. We find enormous cross-individual variation, ranging from zero to over 75%, and strong cohort effects, with younger cohorts investing more internationally than older ones, and each cohort investing more internationally over time. Access to financial advice, lower fees and more international fund options are associated with higher international allocations, suggesting a role for plan design and policy. Education, financial literacy and the fraction of foreign-born population in the zip code also have positive effects on international diversification, consistent with familiarity and information stories.