The demand for risky assets: Sample selection and household portfolios

We estimate a microeconomic model of household asset demands that allows for the fact that households typically have zero holdings of most assets. The adjustments for non-observed heterogeneity generalize methods developed by Dubin and McFadden (1984. Econometrica 52, 345–362). Simulating our model using a random sample of US households, we examine distributional and demographic effects on macroeconomic demands for money, stocks and bonds.