On the stability of risk and time preferences amid the COVID-19 pandemic

Risk, time preferences, trustworthiness and COVID-19 preventive behavior: evidence from France

We analyze how far-sightedness and risk aversion as well as the perceived trustworthiness of others correlate with COVID-19-related protective behaviors in France. We leverage individual-level data from the corona survey of the Survey of Health Aging and Retirement in Europe linked with a paper questionnaire survey about preferences conducted in France just before the coronavirus outbreak. Our results suggest that far-sightedness and risk aversion are strong predictors of individuals' protective behavior. More far-sighted individuals are more likely to not visit their family members anymore, wear a mask, and keep their distance from others when outside, wash their hands more regularly and cover their cough. Risk aversion increases the likelihood of not meeting more than 5 other people and not meeting with family members anymore. Concerning the perceived trustworthiness, we find that a higher level of trust in others reduces compliance with the recommendations about meeting with 5 or more people and family gatherings. We interpret this result as a sign that individuals with trust in others perceive a lower risk of being infected by friends and family members. Hence, they are more willing to take risks when they engage in social interactions when they perceive their relatives as trustworthy. The government should therefore consider individuals' heterogeneity in preferences and beliefs when implementing a strategy to encourage people to comply with its COVID-19 protective recommendations.

Does the COVID-19 pandemic lockdown affect risk attitudes?-Evidence from rural Thailand

Empirical research provides evidence on changes in individuals' risk attitudes after experiencing exogenous shocks. The global outbreak of the COVID-19 pandemic has had various adverse impacts on economies and households. This study utilizes the COVID-19 pandemic and the accompanying lockdown to explore its impact on risk attitudes in rural Thailand using a difference-in-difference (DiD) approach. Overall, we do not find evidence on considerable changes in the willingness to take risks of rural household members after experiencing a lockdown during the pandemic. However, a significant heterogenous effect is found between individuals working inside and outside the agricultural sector. Individuals working outside the agricultural sector have a statistically significant reduction in their willingness to take risks after experiencing a lockdown. Our study provides additional empirical evidence to understand the impact of shocks on rural households' risk attitudes. This sheds light on how policy designs can better help mitigate downward economic trends following exogenous shocks.

Hedonic Risk Preference Associated with High-Risk Behaviors under COVID-19 Pandemic among Medical Students in Japan

BACKGROUND

Public health measures to mitigate the spread of COVID-19 have focused on raising awareness and disseminating knowledge. Few considered people's risk preferences and no measurement was adapted to the context of COVID-19. This study aims (1) to investigate the association between risk preference and risk behaviors and (2) to compare a novel hedonic preference question with traditional risk preference assessment tools in the context of the COVID-19 pandemic among medical students in Japan.

METHODS

An online survey of fourth-year medical students was conducted. Logistic regression analysis adjusted for gender, age, household income, and the overconfidence effect were performed to investigate the association.

RESULTS

We observed significantly higher odds of high-risk behaviors in general risk preference (odds ratio (OR): 4.04; 95% confidence interval (CI): 1.05-15.50) and hedonic preference (OR: 6.58; 95% CI: 1.86-23.28) when adjusted, whereas monetary preference showed no significant association. Concerning specific risky behaviors, hedonic preference were significantly associated with four items after adjusting for covariates ("dine out" (OR: 2.78, 95% CI: 1.13-6.85), "go out" (OR: 4.35, 95% CI: 1.65-11.46), "not practicing safety precautions" (OR: 2.79, 95% CI: 1.11-7.04) and "travel" (OR: 4.36, 95% CI: 1.42-13.44)), and general preference in two ("dine out" (OR: 4.82, 95% CI: 1.66-14.00) and "go out" (OR: 6.48, 95% CI: 2.07-20.24)).

CONCLUSION

Hedonic and general risk preferences were significantly associated with high-risk behaviors during the COVID-19 pandemic. Future application of the novel risk-for-pleasure-seeking preference question is warranted.

Anti-social behaviour and economic decision-making: Panel experimental evidence in the wake of COVID-19

We systematically examine the acute impact of exposure to a public health crisis on anti-social behaviour and economic decision-making using unique experimental panel data from China, collected just before the outbreak of COVID-19 and immediately after the first wave was overcome. Exploiting plausibly exogenous geographical variation in virus exposure coupled with a dataset of longitudinal experiments, we show that participants who were more intensely exposed to the virus outbreak became more anti-social than those with lower exposure, while other aspects of economic and social preferences remain largely stable. The finding is robust to multiple hypothesis testing and a similar, yet less pronounced pattern emerges when using alternative measures of virus exposure, reflecting societal concern and sentiment, constructed using social media data. The anti-social response is particularly pronounced for individuals who experienced an increase in depression or negative affect, which highlights the important role of psychological health as a potential mechanism through which the virus outbreak affected behaviour.

Stability of pro-sociality and trust amid the Covid-19: panel data from the Netherlands

The Covid-19 has impacted most spheres of life and continues to influence the future course of socio-economic decisions. The effects of pandemic and virus contraction on the stability of social preferences are however relatively less know. This study examines the effects of the Covid-19 on pro-sociality and general trust by using the LISS panel data (time frame: 2019-2020) from the Netherlands. The fixed effects panel regressions show that pro-social behavior and general trust do not differ pre-and-after the Covid-19. The article further analyzes the stability of pro-sociality and general trust among people who unfortunately contracted the Covid-19 virus and the uninfected ones (time frame: 2019-2020) using difference-in-differences (DD) method to infer a causal effect of infections on preferences. The DD analysis also leads to insignificant causal effect of virus contractions on pro-sociality and trust. However, the sub-group analysis shows a positive causal impact of infections on trust for respondents above 60 years. Overall, both fixed effects regressions and DD analysis suggest that pro-sociality and to a large extent general trust in the Netherlands are stable despite the negative Covid-19 shock.

Purchasing behavior in rural areas for food products during the COVID-19 pandemic

Introduction

Most previous studies have investigated consumer purchasing behavior for food products in urban areas during the COVID-19 pandemic. In contrast, the present study is one of the very few to investigate consumer purchasing behavior for food products within rural areas.

Methods

To this end, research was conducted in Sicily taking as a case study a rural municipality whose population was subjected to a lockdown regime to contain the spread of the virus. The choice of carrying out the research in a rural rather than an urban area contributed to the emergence of new aspects concerning consumer behavior in rural areas during the COVID-19 emergency.

Results and discussion

The research reveals that the amount of money spent on food purchases, as well as the amount of food purchased, increased during the lockdown. In general, the research shows that COVID-19 impacted the purchasing behavior of consumers in rural areas even though they showed a high resilience and adaptation to the health emergency situation caused by the pandemic.

What drives the acceptability of restrictive health policies: An experimental assessment of individual preferences for anti-COVID 19 strategies

The public acceptability of a policy is an important issue in democracies, in particular for anti-COVID-19 policies, which require the adherence of the population to be applicable and efficient. Discrete choice experiment (DCE) can help elicit preference ranking among various policies for the whole population and subgroups. Using a representative sample of the French population, we apply DCE methods to assess the acceptability of various anti-COVID-19 measures, separately and as a package. Owing to the methods, we determine the extent to which acceptability depends on personal characteristics: political orientation, health vulnerability, or age. The young population differs in terms of policy preferences and their claim for monetary compensation, suggesting a tailored policy for them. The paper provides key methodological tools based on microeconomic evaluation of individuals' preferences for improving the design of public health policies.

Social preferences before and after the onset of the COVID-19 pandemic in China

This study compares Chinese people’s trust and trustworthiness, risk attitude, and time preference before and after the onset of the COVID-19 pandemic in China. We compare the preferences of subjects in two online experiments with samples drawn from 31 provinces across mainland China before and after the onset of the pandemic. We test two competing hypotheses regarding trust and trustworthiness. On the one hand, the outbreak as a collective threat could enhance in-group cohesion and cooperation and thus increase trust and trustworthiness. On the other hand, to the extent that people expect their future income to decline, they may become more self-protective and self-controlled, and thus less trusting and trustworthy and more risk averse and patient. Comparing before and after the onset, we found that the subjects increased in trustworthiness. After the onset, trust and trustworthiness (and risk aversion and present bias too) were positively correlated with the COVID-19 prevalence rate in the provinces. Subjects with more pessimistic expectations about income change showed more risk aversion and lower discount rates, supporting the speculation concerning self-control.

House purchase intention during pandemic COVID-19 in Surabaya, Indonesia

Purpose

Since the COVID-19 occurred, large-scale social restriction (Pembatasan Sosial Berskala Besar-PSBB) has taken place, and that has led family members to carry out their activities at home. This condition impacts both directly and indirectly the intention of house purchase, as a result of lifestyle changes during the pandemic. A house now serves as a residence, office, as well as school. This study aims to determine the influences of physical attributes, neighborhood preferences, financial concerns, financial risk preferences, health risk preferences, and COVID anxiety towards house purchase intention.

Design/methodology/approach

This associative study was carried out from February to May 2021 in the residents of Surabaya aged 20–34 years old as prospective first-home buyers, with relatives at risk of contracting COVID-19 (belong in the susceptible group or live with a family member who is prone to the COVID-19 virus, including having a comorbidity, elderly (= 60 years old), having a low immune system or autoimmune disease, obese). Data were gathered using online questionnaires from which 226 respondents were acquired. Data were analyzed using the PLS-SEM 3.0 technique.

Findings

The results showed that physical attributes, neighborhood preferences, financial concerns, financial risk preferences, and COVID anxiety significantly influence house purchase intention. Furthermore, neighborhood preferences, financial risk preferences, and COVID anxiety as moderating variables also significantly influence house purchase intention.

Practical implications

This study was carried out in Surabaya as the second-largest city after Jakarta with the highest COVID-19 mortality rate, which is useful for exploring the lifestyle changes and property demand as a result of the pandemic; Developers gain a business opportunity by offering properties that are multifunction and health-oriented.

Originality/value

The COVID-19 pandemic becomes a trigger for a change in the property market that needs to be studied further.

Preferences after pan(dem)ics: Time and risk in the shadow of COVID-19

This paper uses the COVID-19 health crisis to study how individual preferences respond to generalized traumatic events. We review previous literature on natural and man-made disasters. Using incentive-compatible tasks, we simultaneously estimate risk and ambiguity aversion, time discounting, present bias, and prudence parameters before, during, and after the COVID-19 lockdown in France. We find patience, risk aversion, and ambiguity aversion fell during lockdown, then gradually returned toward their initial levels 4 months later. These results have implications for health and economic policies, and deepen our understanding of the responses – and resilience – of economic preferences to traumatic events.

Stability of Risk Preferences During COVID-19: Evidence From Four Measurements

This article studies the stability of risk-preference during the COVID-19 pandemic. The results differ between risk-preference measurements and also men and women. We use March 13, 2020, when President Trump declared a national state of emergency as a time anchor to define the pre-pandemic and on-pandemic periods. The pre-pandemic experiment was conducted on February 21, 2020. There are three on-pandemic rounds conducted 10 days, 15 days, and 20 days after the COVID-19 emergency declaration. We include four different risk-preference measures. Men are more sensitive to the pandemic and become more risk-averse based on the Balloon Analogue Risk Task (BART). Women become more risk-averse in the Social and Experience Seeking domains based on the results from the Domain-Specific Risk-Taking (DOSPERT) and Sensation Seeking Scales (SSS). Both men's and women's risk-preference are stable during COVID-19 based on a Gamble Choice (GC) task. The results match our hypotheses which are based on the discussion about whether the psychological construct of risk-preference is general or domain-specific. The differential outcomes between incentivized behavioral and self-reported propensity measures of risk-preference in our experiment show the caveats for studies using a single measure to test risk-preference changes during COVID-19.

Subjective beliefs and economic preferences during the COVID-19 pandemic

The COVID-19 pandemic presents a remarkable opportunity to put to work all of the research that has been undertaken in past decades on the elicitation and structural estimation of subjective belief distributions as well as preferences over atemporal risk, patience, and intertemporal risk. As contributors to elements of that research in laboratories and the field, we drew together those methods and applied them to an online, incentivized experiment in the United States. We have two major findings. First, the atemporal risk premium during the COVID-19 pandemic appeared to change significantly compared to before the pandemic, consistent with theoretical results of the effect of increased background risk on foreground risk attitudes. Second, subjective beliefs about the cumulative level of deaths evolved dramatically over the period between May and November 2020, a volatile one in terms of the background evolution of the pandemic.

SUPPLEMENTARY INFORMATION

The online version contains supplementary material available at 10.1007/s10683-021-09738-3.

On the stability of risk preferences: Measurement matters

We exploit the unique design of a repeated survey experiment among students in four countries to explore the stability of risk preferences in the context of the COVID-19 pandemic. Relative to a baseline before the pandemic, we find that self-assessed willingness to take risks decreased while the willingness to take risks in an incentivized lottery task increased, for the same sample of respondents. These findings suggest domain specificity of preferences that is partly reflected in the different measures.

Risk, uncertainty and ambiguity amid Covid-19: A multi-national analysis of international travel intentions

This study analyses how Covid-19 shapes individuals' international tourism intentions in context of bounded rationality. It provides a novel analysis of risk which is disaggregated into tolerance/aversion of and competence to manage risks across three different aspects: general, domain (tourism) and situational (Covid-19). The impacts of risk are also differentiated from uncertainty and ambiguity. The empirical study is based on large samples (total = 8962) collected from the world's top five tourism source markets: China, USA, Germany, UK and France. Various risk factors show significant predictive powers of individual's intentions to defer international tourism plans amid Covid-19. Uncertainty and ambiguity intolerance is shown to lead to intentions to take holidays relatively sooner rather than delaying the holiday plans.

Long Term Effects of the COVID-19 Pandemic on Social Concerns

While some local, temporary past crises have boosted overall charitable donations, there have been concerns about potential substitution effects that the Covid-19 pandemic might have on other social objectives, such as tackling climate change and reducing inequality. We present results from a donation experiment (n = 1, 762), with data collected between April 2020 and January 2021. We combine data from (i) an online donation experiment, (ii) an extended questionnaire including perceptions, actions, and motives on the Covid-19 pandemic, the climate crisis, and poverty, as well as charitable behavior and (iii) epidemiological data. The experimental results show that donations to diverse social concerns are partially substituted by donations to the Covid-19 fund; yet, this substitution does not fully replace all other social concerns. Over time we observe no systematic trend in charitable donations. In regards to the determinants of individual donations, we observe that women donate more, people taking actions against Covid-19 and against poverty donate more, while those fearing risks from poverty donate less. In addition, we observe that the population under consideration is sensitive to the needs of others, enhancing total donations for higher Covid-19 incidence. For donations to each charity, we find that trusting a given charitable organization is the strongest explanatory factor of donations. JEL: L3, D64, Q54, I3, D9.