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Nonpecuniary Benefits and Asset Market Equilibrium | Synapse

May 1, 1986Financial Review16 citations

Nonpecuniary Benefits and Asset Market Equilibrium

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JCJess H. Chua JSJacques A. Schnabel

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Abstract

ABSTRACT Investments that yield nonpecuniary benefits have been studied empirically in previous research; the existence of such benefits has been inferred as the difference between actual returns and returns predicted by the capital asset pricing model. The authors reformulate the security market line to reflect nonpecuniary benefits and examine the equilibrium conditions for a market wherein some assets yield nonpecuniary benefits for some investors. The reformulated security market line is shown to perform better in such a market. The authors also discuss implications for investors.

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Chua et al. (1986) studied this question.

synapsesocial.com/papers/6a6b85f0547974b2dbf45125 https://doi.org/https://doi.org/10.1111/j.1540-6288.1986.tb01118.x

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