Financial Education and Household Portfolios

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In this study, we examine the efficiency of portfolios on the basis of the simulation data of the portfolio management simulation game. To select the assets, we employ the distance from the efficient frontier that is derived as the index of efficiency from the mean-variance portfolio theory. The results of the Probit analysis are consistent with the results derived from the Binary Panel Probit model analysis. The latter results suggest that the portfolio selected by one who understands new knowledge, possesses several types of assets, and predicts an improvement in the stock market, is efficient. Furthermore, a rise in the price index of stocks prior to portfolio selection decreases the efficiency of a portfolio. The previous portfolio performance does not affect the efficiency of the portfolio.