Does community resilience affect household asset portfolio choices?

Abstract

This paper identifies a positive (negative) relationship between community resilience and household stock market participation (deposit flows). These relationships are less pronounced for higher-income and married households, indicating an income channel and a marriage channel, respectively. Furthermore, compared to white and Asian households, black households are more sensitive to the effects of community resilience on household investments and deposit flows. Overall, our findings suggest that improvements in people's preparedness for, resilience against, and recovery from potential hazardous events and natural disasters shift households' asset portfolio choices from safe savings to risky stock investments.