Journal Article


Morgan Kelly



rate of return individual investors smart money capitalists and financiers stock exchanges current events investment analysis financial performance stocks prices

Do noise traders influence stock prices? (1997)

Abstract This paper tests a smart money-noise trader model directly by comparing its predictions with the behavior of actual investors. It assumes that individual probability of being a noise trader is diminishing in income, high-income households are smart money, lower-income households are noise traders with passive investors in between. Market data behave as predicted: high participation by the general population is a negative predictor of one-year returns, and is associated with law participation by very high-income groups. The implications for the equity premium puzzle of the low returns earned by noise traders are discussed.
Collections Ireland -> University College Dublin -> School of Economics
Ireland -> University College Dublin -> College of Social Sciences and Law
Ireland -> University College Dublin -> Economics Research Collection

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Morgan Kelly

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Morgan Kelly
University College Dublin
Total Publications: 37