Households’ risk perceptions, overplacement, and financial literacy (Tabea Bucher-Koenen, Pirmin Fessler, Maria Silgoner)

Tabea Bucher-Koenen (), Pirmin Fessler () and Maria Antoinette Silgoner ()
Additional contact information
Tabea Bucher-Koenen: University of Mannheim
Pirmin Fessler: Oesterreichische Nationalbank, Economic Analysis Division
Maria Antoinette Silgoner: Oesterreichische Nationalbank

Working Papers from Oesterreichische Nationalbank (Austrian Central Bank)

Abstract: Household financial resilience is related to the availability of financial resources but also to the ability to anticipate and assess future situations and prepare for them accordingly. Overplacement describes the tendency of individuals to rate themselves better than others, i.e. they believe that their own chances of experiencing a negative (positive) event are lower (higher) than those of others. In a randomized survey experiment we asses households’ perceptions of specific risks, which could affect the future financial situation of their own household (treatment) or of a household with similar characteristics (control). On average, households assign lower probabilities to shocks that negatively affect personal finances if asked for their own household compared to a similar household – confirming overplacement bias in the context of financial risks. We do not find the reverse effect for positive shocks. The treatment effect is stronger among households with lower financial literacy, indicating that financial literacy is relevant for the ability to assess future financial shocks.

Keywords: expectations; beliefs; financial behavior; overconfidence; financial resilience (search for similar items in EconPapers)
JEL-codes: D14 D91 G53 (search for similar items in EconPapers)
Pages: 52
Date: 2024-10-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.oenb.at/dam/jcr:8ef4cefa-ee69-4f68-8dac-9ee2a6942f6d/wp-259.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbwp:259

Ordering information: This working paper can be ordered from
Oesterreichische Nationalbank, Economic Studies Division, POB 61, A-1011 Vienna, Austria

Access Statistics for this paper

More papers in Working Papers from Oesterreichische Nationalbank (Austrian Central Bank) P.O. Box 61, A-1011 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Markus Knell ().