STATE INVESTMENT CULTURE AND INVESTMENT BEHAVIOR: EVIDENCE FROM THE 2024 NFCS

Abstract

This thesis examines how state-level investment culture shapes individuals’ investment choices in the U.S. Drawing on Pierre Bourdieu’s concept of habitus and Mark Granovetter’s theory of embeddedness, this paper argues financial behavior is influenced by shared dispositions and social environments in which people are embedded. Using the 2024 FINRA National Financial Capability Study State-by-State and Investor Surveys, this study constructs a state-level measure of “investment culture,” composed of three components: financial dispositions, financial engagement, and financial informational environment. These components are used to analyze participation in four categories of non-retirement investments: traditional, pooled, alternative, and other investments. The findings show the relationship between investment culture and investment behavior is strongly state-dependent. Pooled investments reveal consistent positive association with investment culture, while traditional and alternative investments are more heterogeneous across states. These results suggest investment behavior is socially and contextually structured, with implications for financial welfare and state-specific policy design.