Higher order risk attitudes in the time of COVID-19: an experimental study

Irene Mussio, Maximiliano Sosa Andrés and Abdul H Kidwai

Oxford Economic Papers, 2023, vol. 75, issue 1, 163-182

Abstract: The coronavirus disease (COVID-19) represents a large increase in background risk for individuals. Like the COVID-19 pandemic, extreme events (e.g. financial downturns, natural disasters, and war) have been shown to change attitudes towards risk. Using a risk apportionment approach, we examine whether risk aversion as well as higher order risk attitudes (HORAs) (prudence and temperance) have changed during COVID-19. This methodology allows us to measure model-free HORAs. We include prudence and temperance as higher order measures, as these two have been largely understudied under extreme events but are determinants of decisions related to the health and financial domains. Once we account for socio-demographic characteristics, we find an overall increase in risk aversion during COVID-19. We also find similar results using a hypothetical survey question which measures willingness to take risks. We do not find changes in prudence and temperance using the risk apportionment methodology.

JEL-codes: C91 D81 H12 I12 I18 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1093/oep/gpac007 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:75:y:2023:i:1:p:163-182.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Oxford Economic Papers is currently edited by James Forder and Francis J. Teal

More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().