Financial Risk-Taking under Health Risk

Arbeitspapier

We study how background health risk affects financial risk-taking. We elicit financial risk-taking behavior of a representative sample of more than 5,000 Germans in five panel waves during the COVID-19 pandemic. Exploiting variation in local infections across time and space, we find that an increase in infections affecting background health risk translates into higher levels of self-reported fear and decreases financial investments in a risky asset. Once vaccines become available as a self-insurance device, the tempering effect on investments ceases. Our results provide evidence that non-financial background risks affect financial risk-taking, and for the alleviating effect of self-insurance devices.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 10387

Classification and Topics

• Classification: Wirtschaft ; Household Saving; Personal Finance ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Portfolio Choice; Investment Decisions ; Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets‡

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bos, Björn ; Drupp, Moritz A. ; Meya, Jasper N. ; Quaas, Martin F.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/272031
• Last update: 10.03.2025, 11:45 AM CET