DEPRESSION BABIES: DO MACROECONOMIC EXPERIENCES AFFECT RISK TAKING?
We investigate whether individual experiences of macroeconomic shocks affect financial risk taking, as often suggested for the generation that experienced the Great Depression. Using data from the Survey of Consumer Finances from 1960 to 2007, we find that individuals who have experienced low stock...
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| Veröffentlicht in: | The Quarterly journal of economics 2011-02, Vol.126 (1), p.373-416 |
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| container_title | The Quarterly journal of economics |
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| creator | Malmendier, Ulrike Nagel, Stefan |
| description | We investigate whether individual experiences of macroeconomic shocks affect financial risk taking, as often suggested for the generation that experienced the Great Depression. Using data from the Survey of Consumer Finances from 1960 to 2007, we find that individuals who have experienced low stock market returns throughout their lives so far report lower willingness to take financial risk, are less likely to participate in the stock market, invest a lower fraction of their liquid assets in stocks if they participate, and are more pessimistic about future stock returns. Those who have experienced low bond returns are less likely to own bonds. Results are estimated controlling for age, year effects, and household characteristics. More recent return experiences have stronger effects, particularly on younger people. |
| doi_str_mv | 10.1093/qje/qjq004 |
| format | Article |
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| source | Business Source Complete; Jstor Complete Legacy; Oxford University Press Journals All Titles (1996-Current) |
| subjects | Bond markets Consumer behaviour Demographics Estimation Financial bonds Financial risk Financial risks Great Depression Investment Investment risk Liquid assets Macroeconomics Personal finance Portfolio investments Rates of return Risk aversion Risk taking Securities markets Stock market returns Stock markets Stock returns Stock shares Studies Term weighting U.S.A |
| title | DEPRESSION BABIES: DO MACROECONOMIC EXPERIENCES AFFECT RISK TAKING? |
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