Corona and the stability of personal traits and preferences: Evidence from Germany

Manuel Frondel, Daniel Osberghaus and Stephan Sommer

No 21-029, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Based on panel data on around 5,500 German household heads originating from four years, this paper analyzes whether the experience of financial losses due to the Corona pandemic has affected three kinds of personal traits and preferences: the willingness to take risks, patience, and the locus of control. Our empirical results indicate that patience and the locus of control remain unchanged by the experience of pandemic-related financial losses, whereas we find a significantly negative effect of severe financial losses on risk taking, contrasting with the traditional assumption that such preferences are constant. In this respect, our heterogeneity analysis indicates that financial losses due to Corona particularly affect the most vulnerable households, notably low-income households and those with little income diversification.

Keywords: Patience; risk aversion; locus of control (search for similar items in EconPapers)
JEL-codes: C23 D91 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-eur and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Corona and the stability of personal traits and preferences: Evidence from Germany (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:21029

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