Financial Decisions under the Shadow of Terrorism
34 Pages Posted: 17 Dec 2008 Last revised: 7 Apr 2013
Date Written: 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.
Keywords: terrorism, expectations, household finance, demand analysis
JEL Classification: D12, D14, D74, D84, G11
Suggested Citation: Suggested Citation