Median household income is a driver of differences in the rates at which states report stock market participation. Higher-income states have a higher share of residents reporting participation than lower-income states. D.C.’s median household income is nearly double Mississippi’s, but its median age is five years lower.
Washington, D.C.’s stock market participation also grew faster than any state from 2013 to 2022, by 7%. Washington state participation grew by 4%, California by 3%, and Colorado by 3%.
Overall, 48 out of 51 jurisdictions saw their stock market participation grow. Connecticut, Alaska, and West Virginia shrank by less than a percentage point.
The distinction between capital gains and dividends is important because they track different stock ownership events. Dividend income comes from stock, mutual fund, and REIT payouts, so it’s a fairly direct measure of stock ownership. Capital gains, as reported on a tax return, can come from selling any asset, including real estate or a business, not just stocks, so it’s a broader measure of income that may not be derived from selling a stock.