A new study by a Harvard economist says the wealth effect has a stronger hold on the stock market than economists expected.
The study, by Michael Chasan and Daniel Sperling, looks at the stock-market price movements of the top 400 wealthiest Americans and the bottom 400, starting in 1995.
They found that the stock markets of the 400 richest Americans were more volatile than the stock portfolios of the bottom 40 percent of Americans.
The researchers also found that when the stock prices of the wealthiest Americans began to rise, their portfolios of stocks were more stable and their returns more predictable than those of their poorer peers.
The average American in the top 1 percent of the U.S. population holds about $15.6 million in wealth.
That figure is $10,700 less than what the bottom 50 percent of households have in their portfolios.
The top 400 Americans own about 10 times as much as the bottom 100 percent of U.N. members and three times as many as the poorest 1 percent.
The average U.K. household is worth just over $13,000, the study found.
The bottom 400 Americans are worth about $2,000 less than the average U