01729cas a2200241 a 4500 AALejournalIMF003927 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451862898 1018-5941 BD-DhAAL BD-DhAAL Munoz, Sonia. Habit Formation and Persistence in Individual Asset Portfolio Holdings : The Case of Italy / Sonia Munoz. Washington, D.C. : International Monetary Fund, 2006. 1 online resource (44 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper uses six waves of the Bank of Italy Survey of Households Income and Wealth to explore the dynamics of asset portfolio ownership. The household asset portfolio decision is a choice among discrete alternatives, and I model the problem in a multinomial framework. I focus on a particularly important feature of household portfolio behavior: the infrequency of portfolio allocation changes. I find evidence of strong unobserved heterogeneity through time-varying error components, which I interpret as taste persistence in both the risky and safe asset participation decisions. I estimate the model using the method of maximum smoothly simulated likelihood. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2006/029 Full text available on IMF http://elibrary.imf.org/view/journals/001/2006/029/001.2006.issue-029-en.xml IMF e-Library