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

Can major public health emergencies increase the participation of commercial insurance? Evidence from China

Background

Public health emergencies have a lasting impact on a country's economic and social development. However, commercial insurance can disperse these negative consequences and reduce risk losses.

Method

Based on the Chinese Household Tracking Survey and Peking University Digital Inclusive Finance Index, this study employed a difference-in-differences model to test the impact of the COVID-19 outbreak on commercial insurance participation and the impact mechanism.

Results

The analysis showed that the outbreak of COVID-19 improved residents' risk perception, risk preference and digital finance and promoted their participation in commercial insurance, commercial endowment insurance, and commercial medical insurance.

Conclusion

Major public health emergencies can increase commercial insurance participation, but the promotional effect of commercial insurance on rural and low-income individuals is relatively limited. To tap into potential customers, financial institutions should focus on vulnerable societal groups. This study supplements the relevant literature on the impact of major public health emergencies on commercial insurance participation.

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.

Time and risk preferences and the perceived effectiveness of incentives to comply with diabetic retinopathy screening among older adults with type 2 diabetes

Behavioral economics has the potential to inform the design of incentives to improve disease screening programs by accounting for various behavioral biases. We investigate the association between multiple behavioral economics concepts and the perceived effectiveness of incentive strategies for behavioral change among older patients with a chronic disease. This association is examined by focusing on diabetic retinopathy screening, which is recommended but very variably followed by persons living with diabetes. Five time and risk preference concepts (i.e., utility curvature, probability weighting, loss aversion, discount rate, and present-bias) are estimated simultaneously in a structural econometric framework, based on a series of deliberately-designed economic experiments offering real money. We find that higher discount rates and loss aversion and lower probability weighting are significantly associated with lower perceived effectiveness of intervention strategies whereas present-bias and utility curvature have an insignificant association with it. Finally, we also observe strong urban vs. rural heterogeneity in the association between our behavioral economic concepts and the perceived effectiveness of intervention strategies.

Positive and Negative Risk-Taking in Adolescence and Early Adulthood: A Citizen Science Study During the COVID-19 Pandemic

Sensation seeking is an important underlying factor of both positive and negative forms of risk-taking during adolescence and early adulthood. However, macro-factors such as the global COVID-19 pandemic may influence sensation seeking opportunities and risk-taking behaviors that are considered negative and positive. Therefore, the primary aim of this study was to examine the associations between sensation seeking and behaviors that are considered positive or negative forms of risk-taking during the Covid-19 pandemic in a sample of adolescents and early adults (N = 660, M_age = 22.91, SD = 3.14). Using citizen science methods, negative risk-taking was defined as taking unaccepted risks, such as falsifying vaccination reports or deliberately contracting COVID-19. Positive risk-taking was defined as taking socially accepted risks, such as balancing between the risk to infect elderly people and the need to socialize with peers. Results showed that participants with higher levels of sensation seeking took more positive and negative COVID-19 related risks. An additional finding was that sensation seeking was positively associated with the need to contribute to society. This indicates that during adolescence and early adulthood, sensation seeking may be a driving factor for both positive (i.e., socially accepted) and negative (i.e., socially unaccepted) risk-taking in the context of a high-stake global pandemic, arguing against a one-direction negative relation between sensation seeking and risk-taking.