Cancer and Portfolio Choice: Evidence from Norwegian Register Data

We examine the portfolio choices of 70,000 couples following a cancer diagnosis, including choices made in the event the diagnosed partner ends up dying. A matched sample of comparable couples is assembled using an approach that minimizes the likelihood that lifestyle factors differ between the treatment and control group. We find that a cancer diagnosis leads to lower financial risk-taking both in the form of participation in the stock market and a risky share of the financial portfolio. Widowhood decreases stock market participation by a factor of ten relative to non-fatal cancers. The effect depends on the relative importance of the deceased’s human capital. There is no link between prior experience with cancer and current portfolio choice.