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Department Name

Finance, Real Estate, and Insurance

General Information

Course Information

Professor Dow's Research Page


Papers are working paper versions in PDF form.


Papers on Individual Financial Management


The Importance of Flexibility in Savings Plans. (soon)


The Importance (or Non-Importance) of Distributional Assumptions in Monte Carlo Models of Saving.

Abstract: Monte Carlo models of saving use a wide variety of processes to generate their random returns. This paper examines in detail several different methods in the context of a typical savings problem. The paper finds that there isn’t a dramatic difference between using a bootstrap procedure and drawing returns from a normal distribution. Whether the Great Depression is included or not in the bootstrap also doesn’t matter significantly. What does matter is whether serial correlation is incorporated, particularly if bonds are a significant part of the portfolio. Unfortunately, each of the bootstrap methods that deal with serial correlation has significant flaws. Drawing random numbers from an autoregressive process avoids some of these flaws but introduces several estimation issues.



Neighborhood Effects and Asset Allocation

with James Chong and G. Michael Phillips

Abstract: Previous research has shown racial/ethnic effects in asset allocation.  We extend these results by showing how these effects depend on the racial composition of the neighborhood. In particular, we show that in predominately white neighborhoods there are significant differences in asset allocations across racial groups; however, in mixed or white minority neighborhoods, this difference disappears.  We also find that Asians, a previously understudied group, show a greater willingness to hold risky assets compared with other groups.


Age, Investing Horizon and Asset Allocation

Journal of Economics and Finance, forthcoming

Abstract: In contrast to standard financial advice, most empirical evidence suggests that stockholding increases with age.  One difficulty in interpreting this is that age may not effectively proxy for investing horizon or that age may be proxying for other effects, such as increases in financial sophistication. Using data from the most recent Survey of Consumer Finances this paper finds that age is not closely related to reported investing horizon and that proxies for investment horizon and financial sophistication are significant for stockholding.


Changes in Stockholding Behavior: Evidence from Household Survey Data

with Kenneth Chapman and Govind Hariharan

Finance Research Letters 2, 89-96 (2005)

Abstract: This paper investigates the factors that cause households to switch between stockholding and non-stockholding using a household-level data set covering a period of 12 years.  We find that there is a surprising amount of turnover; a large number of households switch back and forth between stockholding and non-stockholding several times during the sample period.  We show evidence that this is in part a reaction to changes in stock prices over the period. 



Papers on Financial Institutions



The Popularity of Payday Lending: Politics, Religion, Race or Poverty?

Southwestern Economic Review, forthcoming.

Abstract: Graves and Peterson (2008), using state-level data, argue that states with larger Christian Evangelical populations make greater use of payday lending.  Using the same data, this paper finds that the number of Christian Evangelicals in a state predicts whether a state allows payday lending; however, payday lending use is better explained by race, poverty, and surprisingly, political beliefs.  The paper also finds that states that ban payday lending would not necessarily be higher-than-average users of payday lending. 


The Adoption of Web Banking at Credit Unions

The Quarterly Review of Economics and Finance 47 435-448 (2007).

Abstract:  This paper examines the decision to adopt web and personal computer banking by credit unions.  It finds that larger credit unions are more likely to adopt new technologies, are more likely to adopt earlier, and are more likely to offer more advanced versions of the technology.  There is also some evidence that credit unions that provide web access also tend to offer interest rate spreads that are less beneficial for their