Household risk taking after the financial crisis

Sarah Necker and Michael Ziegelmeyer

The Quarterly Review of Economics and Finance, 2016, vol. 59, issue C, 141-160

Abstract: This study investigates whether and how the crisis in 2008/2009 affects households’ risk attitudes, subjective risk and return expectations, and planned financial risk taking using the German SAVE study. Households’ wealth change from end-2007 to end-2009 is not found to have an effect. However, households that attribute losses to the crisis decreased their risk tolerance and planned risk taking; the probability of expecting an increase in risks and returns is increased. According to economic theory, wealth changes attributed to a dramatic event should not have a different effect than other wealth changes. The results suggest an emotional reaction.

Keywords: Financial crisis; Risk preferences; Stock market expectations; Wealth fluctuations; Emotions (search for similar items in EconPapers)
JEL-codes: D14 D81 G11 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (40)

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Related works:
Working Paper: Household Risk Taking after the Financial Crisis (2014)
Working Paper: Household Risk Taking after the Financial Crisis (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:59:y:2016:i:c:p:141-160

DOI: 10.1016/j.qref.2015.03.006

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