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Household Risk Taking after the Financial Crisis

Listed author(s):
  • Sarah Necker

    ()

  • Michael Ziegelmeyer

    ()

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.

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File URL: http://www.bcl.lu/fr/Recherche/publications/cahiers_etudes/85/BCLWP085.pdf
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Paper provided by Central Bank of Luxembourg in its series BCL working papers with number 85.

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Length: 42 pages
Date of creation: Feb 2014
Handle: RePEc:bcl:bclwop:bclwp085
Contact details of provider: Web page: http://www.bcl.lu/

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