The inclusion of fixed effects does not change our basic finding, though it does reduce the magnitude of the coefficient considerably. Now wealth elasticity predicts volatility with a coefficient of .030 (t-statistic of ). The statistical significance is still strong; the size and precision of our data set enables us to obtain relatively small standard errors. A key issue is the interpretation of the economic significance of the coefficient. There is certainly a plausible argument to be made that the economic impact is small. Multiplying typical CEO wealth elasticities for 1995 by the .03 coefficient gives results in the range .
