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Household Risk Taking after the Financial Crisis

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  • Necker, Sarah
  • Ziegelmeyer, Michael

    (Munich Center for the Economics of Aging (MEA))

Abstract

This study investigates whether and how the crisis in 2008/2009 a ects 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 e ect. 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 di erent e ect than other wealth changes. The results suggest an emotional reaction.

Suggested Citation

  • Necker, Sarah & Ziegelmeyer, Michael, 2014. "Household Risk Taking after the Financial Crisis," MEA discussion paper series 201402, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    • Handle: RePEc:mea:meawpa:201402
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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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