| By: |
Bucher-Koenen, Tabea;
Fessler, Pirmin;
Silgoner, Maria Antoinette |
| Abstract: |
We examine the financial resilience of Austrian households, relating it to
their experience of financial shocks earlier in life and to their financial
literacy. We find that previous negative (positive) financial shocks are
negatively (positively) related to financial resilience. Financial literacy
and households' financial resilience are positively related. Based on a
randomized survey experiment, we investigate the role of over-optimism when
evaluating the potential impact of future events on households' financial
situation. Households are asked to assess specific risks for their own
household (treatment) or for a household with similar characteristics
(control). On average, households assign a lower probability to shocks that
negatively affect personal finances if asked for their own household compared
to a similar household. We do not find the reverse effect for positive shocks.
We find a negative correlation between over-optimism and financial literacy,
indicating that financial literacy is relevant to both, financial behavior and
the ability to assess financial shocks. |
| Keywords: |
financial fragility, expectations, risk assessment, financial behavior, over-optimism |
| JEL: |
D14 D91 G53 |
| Date: |
2023 |
| URL: |
https://d.repec.org/n?u=RePEc:zbw:zewdip:283612 |