Household Financial Decision Making Amidst the COVID-19 Pandemic

Pengpeng Yue, Aslihan Gizem Korkmaz and Haigang Zhou

Emerging Markets Finance and Trade, 2020, vol. 56, issue 10, 2363-2377

Abstract: This paper investigates the impact of the COVID-19 pandemic on household investment decisions using a novel survey conducted by the Survey and Research Center for China Household Finance. We use linear probability and probit models to analyze the effects of COVID-19 at the household level. Our results show that households who know someone infected with COVID-19 lose confidence in the economy. They are more likely to change their risk behavior and become risk-averse. Further, COVID-19 increases the probability that a household will change its investment portfolio. More specifically, it causes a 9.15% decrease in the total investment amount.

Date: 2020
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DOI: 10.1080/1540496X.2020.1784717

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