Financial Decisions under the Shadow of Terrorism
European Central Bank (ECB) - Directorate General Research; Centre for Studies in Economics and Finance (CSEF), University of Naples Federico II; Center for Financial Studies (CFS); ARC Centre of Excellence in Population Ageing Research (CEPAR)
University of Frankfurt; European Central Bank (ECB) - Directorate General Research; Center for Financial Studies (CFS)
April 4, 2013
We investigate, using the 2002 US Health and Retirement Study, individuals’ insecurity and expectations about terrorism, and their effects on household financial decisions. We find that those without any military experience, the less educated, the more religious and females worry a lot about their safety. In addition, fear of terrorism discourages households from investing in stocks and owning a business, while it makes them more likely to buy term life insurance.
Number of Pages in PDF File: 34
Keywords: terrorism, expectations, household finance, demand analysis
JEL Classification: D12, D14, D74, D84, G11working papers series
Date posted: December 17, 2008 ; Last revised: April 7, 2013
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