Economic theory suggests that households should invest their financial wealth in a combination of cash and a well-diversified equity portfolio. Yet, many households' equity investments are strongly concentrated in a few assets. Attempts to explain this discrepancy have included low levels of...

This paper examines the long-term impact of natural disasters on household portfoliochoices. In particular, we study this issue with the Wen Chuan Earthquake thatoccurred in China in 2008 as an exogenous natural disaster event. Previous literaturesfind that natural disasters can cause affected...