Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153733
Authors: 
Bucher-Koenen, Tabea
Ziegelmeyer, Michael
Year of Publication: 
2011
Series/Report no.: 
ECB Working Paper 1299
Abstract: 
We study how and to what extent private households are affected by the recent financial crisis and how their financial decisions are influenced by this shock. Our analysis reveals that individuals with low levels of financial literacy are less likely to have invested in the stock market and thus are less likely to report losses in wealth. Yet, individuals with low financial literacy are more likely to sell their assets which lost in value (realize losses). This reaction to short-term losses has potential long-term consequences if individuals do not participate in markets' recovery and face lower returns in the long run.
Subjects: 
cognitive ability
financial crisis
financial literacy
life-cycle savings
Portfolio Choice
saving behavior
JEL: 
D91
D14
G11
Document Type: 
Working Paper

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