IFin Seminar, Michaela Pagel, Washington University Olin Business School - "Some Capital Gains are Consumed More Equally than Others"
Institute of Finance
Date: 28 May 2026 / 12:25 - 13:40
Speaker: Michaela Pagel, Washington University Olin Business School
Title: "Some Capital Gains are Consumed More Equally than Others"
Date: 28.05.2025
Time: 12:25 - 13:40
Room: Red Room
Abstract
This paper studies whether investors consume capital gains at different rates depending on where they appear in their portfolio platform’s display ranking. Using linked account-level data on mutual fund holdings and consumption records from 180,000 active investors on the world’s largest mobile payment platform, we document substantially larger consumption responses to capital gains from funds that are ranked more highly. Exploiting quasi-exogenous variation due to the platform’s group-based ranking rule, we find that capital gains from a mechanically elevated fund generates an additional 2.15% in consumption. Consistent with limited and selective attention, the effects are strongest at the top of the platform’s ranking, concentrated in capital gains rather than losses, and larger among investors holding more funds. Finally, we show that fund-level attention effects aggregate to persistent portfolio-level consumption differences across investors with varying exposure to salient holdings.