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Cited by 125Financial Literacy, Pension, Retirement AnalysisFinancial Literacy and BehaviorFinancial Markets and Investment Strategies

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Once Burned, Twice Shy? Financial Literacy and Wealth Losses during the Financial Crisis

Bucher-Koenen, Tabea, Ziegelmeyer, Michael·2014·Review of Finance
DOI 10.1093/rof/rft052
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Abstract

The recent financial crisis caused a shock to private wealth. Households with low financial literacy are less likely to own risky assets directly. Therefore, fewer of them report financial losses. More importantly, financially illiterate households are more prone to sell assets that have lost in value. Thereby losses become permanent, and these households do not participate in markets’ resurgence. This flight from risky assets is persistent—the financial crisis may prove to be a traumatic experience that shapes investment behavior and gives rise to serious distributional consequences, as households with lower financial literacy face lower returns in the long run.

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Metadata

Authors
Bucher-Koenen, T., & Ziegelmeyer, M.
Affiliations
  • 1 Max-Planck-Institute for Social Law and Social Policy, Munich and Netspar and 2Banque centrale du Luxembourg and Max-Planck-Institute for Social Law and Social Policy
  • Max Planck Society (DE)
ORCID
Ziegelmeyer, Michael
Venue
Review of Finance
Publisher
Oxford University Press (OUP)
Published
2013-11-30
Volume
18
Issue
6
Pages
2215-2246
ISSN
  • 1382-6662 (ISSN-L)
  • 1573-692X
  • 1572-3097
DOI
10.1093/rof/rft052
OpenAlex
W1969112252
Cited by
125
References
2
Citations by year
2026: 7 · 2025: 11 · 2024: 14 · 2023: 15 · 2022: 6 · 2021: 16 · 2020: 11 · 2019: 10 · 2018: 4 · 2017: 14 · 2016: 6 · 2015: 5 · 2014: 6
FWCI
21.99
Type
journal article
Language
en
Open access
closed
Locations
  • European Finance Review (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • MADOC (University of Mannheim) (submittedVersion)
Funders
  • Dartmouth College
  • Deutsche Forschungsgemeinschaft
  • Universität Mannheim
Topics
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Literacy, Pension, Retirement Analysis
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy and Behavior
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
Keywords
financial literacy, 2008 financial crisis, household wealth, investment behavior, distributional effects, long-run returns, behavioral finance

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CoChat. (2026). Citation check: Once Burned, Twice Shy? Financial Literacy and Wealth Losses during the Financial Crisis. https://app.cochat.ai/papers/10.1093/rof/rft052
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Bucher-Koenen, T., & Ziegelmeyer, M. (2014). Once Burned, Twice Shy? Financial Literacy and Wealth Losses during the Financial Crisis. Review of Finance. https://doi.org/10.1093/rof/rft052