Zoltán Rácz’s dissertation is entitled, “Essays on Portfolio Choice and Wealth Inequality” and consists of three self-contained chapters. As the title suggests, Zoltán's research concerns heterogeneity in portfolio choice decisions of households and its effect on wealth inequality.

A robust empirical finding is that wealthier households keep their savings in riskier assets characterized by higher expected returns in average, which was shown to substantially contribute to wealth inequality in earlier research. Chapters 1 and 3 provide two alternative mechanisms, namely interactions of portfolio choice and housing decisions, and preference heterogeneity across households to generate empirically plausible portfolio choice patterns over the wealth distribution. Finally, chapter 2 develops an analytically tractable theoretical framework to investigate how optimal saving and portfolio choice decisions are affected by the presence of discrete decisions, such as buying or selling real estate.