Household Risk Taking after the Financial Crisis

This study investigates whether and how the crisis in 2008/2009 aects 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 eect. 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 dierent eect than other wealth changes. The results suggest an emotional reaction.