I have another hypothesis. Lets assume that the number of people who want to buy stocks is much more than the number of people who want to buy bonds.
Although the stock market often commands more media attention, the bond market is actually much bigger and is vital to the ongoing operation of the public and private sector:
The world wide numbers are similar, the bond market is about twice as big.
Absolutely correct!
Bond market is many multiples larger, but equities are far more accessible to individual (retail) investors directly.
Bonds still have to be purchased generally near par ($1k), whereas most stocks are all over. Plus, bonds are measured on credit quality, duration, and rate sensitivities rather than the name itself.
AAPL stock vs MSFT stock is a very different comparison than AAPL bonds vs MSFT bonds. Assuming they are rated similarly, the bonds will be much closer in yield for similar maturity whereas the stock could be anywhere.
The most easily understandable example of a bond is a mortgage. The bank holds a "bond" from you, and has some recourse in the form of taking the property if you fail to meet the requirements.