An Evaluation of the Effect of the COVID-19 Pandemic on the Risk Tolerance of Financial Decision Makers

Wookjae Heo, Abed Rabbani and John E. Grable

Finance Research Letters, 2021, vol. 41, issue C

Abstract: This paper documents the negative effect of the COVID-19 pandemic on financial risk attitudes across a broad sample of financial decision makers (N = 18,913). Findings show that the risk tolerance of financial decision makers can be altered when an extreme economic, social, or environmental shock occurs. A general shift away from be willing to take financial risk was noted after the COVID-19 pandemic emergency declaration. The COVID-19 pandemic shifted risk preference downward for the majority of financial decision makers in this study.

Keywords: Financial Risk Tolerance; COVID-19 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:41:y:2021:i:c:s1544612320316561

DOI: 10.1016/j.frl.2020.101842

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