Johannes Fleck, European University Institute in Florence and University of Oslo. "Beliefs, Precautionary Savings and Homeownership"

ESOP seminar. Johannes Fleck is a PhD candidate in economics at the European University Institute in Florence and a guest researcher at the University of Oslo. He will present the paper: Beliefs, Precautionary Savings and Homeownership.

Photo of Johannes Fleck

Johannes Fleck


We present evidence showing that individual beliefs on the effectiveness of formal and informal sources of risk sharing determine financial precautionary behavior; net liquid wealth decreases in high expectations regarding public insurance but increases in high expectations regarding communal insurance. We rationalize this dichotomy in a dynamic portfolio choice model with private risk sharing. Moreover, we find that both beliefs affect the probability to take on financial risk to become a homeowner and the mortgage loan-to-value ratio. Our findings are robust across a wide range of econometric controls and specifications.


Published Dec. 7, 2020 5:26 PM - Last modified May 26, 2021 3:12 PM