Financial Decisions under the Shadow of Terrorism

34 Pages Posted: 17 Dec 2008 Last revised: 7 Apr 2013

See all articles by Dimitris Christelis

Dimitris Christelis

Adam Smith Business School, University of Glasgow; Centre for Studies in Economics and Finance (CSEF), University of Naples Federico II; Center for Financial Studies (CFS); Netspar

Dimitris Georgarakos

European Central Bank (ECB) - Directorate General Research; Center for Financial Studies (CFS)

Date Written: April 4, 2013

Abstract

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

Christelis, Dimitrios and Georgarakos, Dimitris, Financial Decisions under the Shadow of Terrorism (April 4, 2013). Available at SSRN: https://ssrn.com/abstract=1317086 or http://dx.doi.org/10.2139/ssrn.1317086

Dimitrios Christelis

Adam Smith Business School, University of Glasgow ( email )

Room 207F, Gilbert Scott Building
University Avenue
Glasgow, Scotland G12 8QQ
United Kingdom
+44 141330 2000 (ext. 0624) (Phone)

HOME PAGE: http://www.gla.ac.uk/schools/business/staff/dimitrioschristelis/

Centre for Studies in Economics and Finance (CSEF), University of Naples Federico II ( email )

Via Cintia, Monte S. Angelo
Naples, NA 80126
Italy

Center for Financial Studies (CFS) ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Dimitris Georgarakos (Contact Author)

European Central Bank (ECB) - Directorate General Research ( email )

Sonnemannstrasse 20
Frankfurt am Main, 60314
Germany

Center for Financial Studies (CFS) ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

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