Household Risk Taking after the Financial Crisis
Sarah Necker () and
Michael Ziegelmeyer ()
No 85, BCL working papers from Central Bank of Luxembourg
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 raised. 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 and economic crisis; risk preferences; stock market expectations; wealth fluctuations; emotions (search for similar items in EconPapers)
JEL-codes: D81 D14 G11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-sog and nep-upt
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Journal Article: Household risk taking after the financial crisis (2016)
Working Paper: Household Risk Taking after the Financial Crisis (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bcl:bclwop:bclwp085
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