Project Description

The central purpose of the project is to investigate how expectations of economic actors are formed. It aims at studying expectations and investment decisions on the different stock exchanges in the period 1897 to 1931. Investment decisions on stock markets are particularly interesting since here one observes types of investment behavior, which finance models failed to predict so far. For instance, it can be shown that investors take high idiosyncratic risk, under-diversify their portfolios or gamble with stocks, which is possibly driven by overconfidence and herding behavior. Moreover, previous research has shown that socioeconomic characteristics of individual investors influence their expectations and investment decisions. In order to improve the interpretation of stock market behavior of investors it is necessary to learn more about how their characteristics changed and influenced their behavior. So far there is little information about individual investors and there are no analyses of investor characteristics in this period. Therefore, a central task of this project is to reveal typical characteristics of investors. 

In future, it is planned to study individual savings decisions based on information of individual savings books, household books, diaries and other available archival material for the period 1870 to 1970. Overall, one can see that socioeconomic characteristics of individuals strongly influence the expectations and therefore not only the investment behavior but also the saving behavior. In a first step, we aim at learning more about which characteristics mattered most and how this changed over time.

Research Grants

2019-2021         “Individual Experience and saving behavior”. The project is funded by the German Research Foundation (DFG) with 300.980 Euro.

2015-2018      “Expectations and experience: What governed investment in banking stocks (1897-1931)”. The project was funded by the German research Foundation (DFG) with 354.027 Euro.

More information on SPP 1859

Involved Researchers

Andreas Neumayer (andreas.neumayer@uni-hohenheim.de)

Sibylle Lehmann-Hasemeyer (sibylle.lehmann@uni-hohenheim.de)

Project-related Publications

Lehmann-Hasemeyer, S. and Neumayer, A. (2018). The persistence of ownership inequality- Investors on the German stock exchanges 1869-1945, Hohenheimer Discussion Paper in Business, Economics and Social Sciences. No. 20.

Neumayer, A. (2018). There’s no place like home: Investors’ Home Bias in Germany, 1898 -1934, Jahrbuch für Wirtschaftsgeschichte/Economic History Yearbook 59 (1), 447-469.

Lehmann-Hasemeyer, S. and Neumayer, A. (2019). Does the preference for investment in local firms rise in turbulent times? Evidence from the portfolio of Joseph Frisch, private banker (1923-1955), Zeitschrift für Unternehmensgeschichte, 64(1), 1-18.

Lehmann-Hasemeyer, S. and Streb, J. (2018). Does Social Security Crowd Out Private Savings? The Case of Bismarck’s System of Social Insurance.  European Review of Economic History, 22(3), 298–321,