Past Experiences, Personality Traits, and Risk Aversion: Evidence from Individual Risk Attitudes during the COVID-19 Pandemic

Yun Wang and Mingyang Yan
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Yun Wang: School of Economics, Renmin University of China, Beijing 100872, China
Mingyang Yan: The Wang Yanan Institute for Studies in Economics, Xiamen University, Xiamen 361005, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2020, vol. 15, issue 4, 575-625

Abstract: Individuals¡¯ risk attitudes play an important role in economic decision making and policy evaluation, particularly in the midst of unprecedented uncertainty caused by the COVID-19 pandemic. We adopt a multiple-price-list elicitation method with real money incentives to measure precisely individuals¡¯ risk attitudes at different stake levels and the extent to which they are affected by personal and social shocks following the COVID-19 outbreak in China. We find that subjects who had previously experienced negative personal shocks are more risk-averse at medium and large stakes but more risk loving at very small stakes. For our sample, COVID-19 has no significant impact on risk attitudes, as it is more likely to be regarded as a social shock. The result indicates that the impact of COVID-19 on individual risk attitudes is not as influential as expected, unless the individual¡¯s personal life is affected directly.

Keywords: risk attitude; risk instability; behavioral economics; negative shock; COVID-19 pandemic (search for similar items in EconPapers)
JEL-codes: C83 C91 D81 D91 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:15:y:2020:i:4:p:575-625

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