Editing Stock market (section)

====Determinants and possible explanations of stock market participation====
In a 2003 paper by Vissing-Jørgensen attempts to explain disproportionate rates of participation along wealth and income groups as a function of fixed costs associated with investing. Her research concludes that a fixed cost of $200 per year is sufficient to explain why nearly half of all U.S. households do not participate in the market.<ref>{{Cite journal |first=Annette |last=Vissing-Jørgensen |title=Perspectives on Behavioral Finance: Does 'Irrationality' Disappear with Wealth? Evidence from Expectations and Actions |journal=NBER Macroeconomics Annual |volume=18 |year=2003 |pages=139–194 | doi=10.1086/ma.18.3585252 | citeseerx=10.1.1.195.7189 |s2cid=224798356 }}</ref> Participation rates have been shown to strongly correlate with education levels, promoting the hypothesis that information and transaction costs of market participation are better absorbed by more educated households. Behavioral economists Harrison Hong, Jeffrey Kubik and Jeremy Stein suggest that sociability and participation rates of communities have a statistically significant impact on an individual's decision to participate in the market. Their research indicates that social individuals living in states with higher than average participation rates are 5% more likely to participate than individuals that do not share those characteristics.<ref>{{Cite journal | title=Social Interaction and Stock-Market Participation | last=Hong | first=Harrison | date=February 2004 | journal=The Journal of Finance | volume=59 | pages=137–163 | doi=10.1111/j.1540-6261.2004.00629.x | url=https://surface.syr.edu/cgi/viewcontent.cgi?article=1060&context=ecn | access-date=September 24, 2019 | archive-date=August 8, 2020 | archive-url=https://web.archive.org/web/20200808005416/https://surface.syr.edu/cgi/viewcontent.cgi?article=1060&context=ecn | url-status=live }}</ref> This phenomenon also explained in cost terms. Knowledge of market functioning diffuses through communities and consequently lowers transaction costs associated with investing.