NONPECUNIARY BENEFITS AND ASSET MARKET EQUILIBRIUM
Version of Record online: 9 MAR 2005
Volume 21, Issue 2, pages 185–190, May 1986
How to Cite
Chua, J. H. and Schnabel, J. A. (1986), NONPECUNIARY BENEFITS AND ASSET MARKET EQUILIBRIUM. Financial Review, 21: 185–190. doi: 10.1111/j.1540-6288.1986.tb01118.x
- Issue online: 9 MAR 2005
- Version of Record online: 9 MAR 2005
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.