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Mike Young – Darden – Brown Bag Series
5 September 2018 @ 1:30 pm - 2:30 pm
Terrorist Attacks and Household Trading
Using two sources of household data, we show that an increase in terrorist attacks leads individual investors to reduce stock market participation and overall trading activities. The effects of attacks are evident both in households located in the state of the attack, as well as those living in large metropolitan cities. We find support for a flight home effect through the increase in trading of local stocks following attacks. Adding to the recent literature on gender and market stability, we find that the main results are concentrated in male traders and households with married couple. In addition to a drop in equity market participation, households respond by increase the value of their savings.