GGU Finance Chair Co-Authors Study on Investment Decisions of University Employees

Dr. Andrea Anthony, Assistant Professor and Chair of the Finance and Economics Department at GGU, has co-authored a paper that was recently covered by Reuters. The study, Does the Source of Money Determine Retirement Investment Choices?, examines whether public university employees treat their “free money” differently from their “earned money.” In other words, it analyzes how the investment choices in the optional pension plan funded by the employer differ from the investment choices funded by employees themselves in voluntary salary reduction 403(b) accounts.

Dr. Anthony says: “One of the reasons why my co-authors and I wrote this paper is because 403(b) plans, on which the nonprofit and public sectors rely, have not been studied as thoroughly as 401(k) plans.” Based on data from Oregon State University, the paper found that the level of risk associated with voluntary, salary-reduction investments in 403(b) accounts is lower than the risk those same employees are currently taking in their employer funded 401(a) accounts.

Praising Dr. Anthony’s work in Reuter’s, James Saft wrote: “The study isn’t useful just because it demonstrates that we become more risk-averse if we feel it is ‘our’ money at stake, but also that it points out some fundamental flaws in the system in the U.S., which is dominated by self-directed retirement savings accounts in which the beneficiary makes the decision about how to invest…Retirement savers should be investing in equities and other high-risk, high-reward assets if they meet their own risk profile well, not avoiding them because it would be painful to lose what feels like your own hard-earned money.”

Dr. Anthony adds: “Mr. Saft’s analogy about picking your pocket at the race track and comparing how you spend what you think is your earned money compared to your free reward money is very perceptive. Investors should not base their risk preferences for investments with money entirely funded by their employer differently than those investments with money funded by forgone take-home pay. There are a number of reasons that could contribute to suboptimal retirement allocation and this study helps in identifying another potential behavioral bias.”

Does the Source of Money Determine Retirement Investment Choices? is available is available on SSRN.

About Dr. Andrea Anthony

Dr. Andrea Anthony is an Assistant Professor and Chair of the Finance and Economics Department. Before joining Golden Gate University, she spent two years at Oregon State University in Corvallis, Oregon as a tenure-track Assistant Professor of Finance. Anthony completed her Ph.D. in June 2014 at the University of Oregon in Eugene, Oregon. She earned her BBA from Gonzaga University in Spokane, Washington. Prior to pursuing her Ph.D., Dr. Anthony worked in several corporate finance roles with The Boeing Company at the company’s Seattle and Chicago locations. These positions included New Aircraft Finance and Contract Negotiation, Financial Planning and Analysis, Cost Estimating, Revenue Management, International Accounting, and Procurement Cost Analysis.


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