Risk taking, preferences, and beliefs: Evidence from Wuhan

Arbeitspapier

We study risk taking in a panel of subjects in Wuhan, China - before, during the COVID-19 crisis, and after the country reopened. Subjects in our sample traveled for semester break in January, generating variation in exposure to the virus and quarantine in Wuhan. Higher exposure leads subjects to reduce planned risk taking, risky investments, and optimism. Our findings help unify existing studies by showing that aggregate shocks affect general preferences for risk and economic expectations, while heterogeneity in experience further affect risk taking through beliefs about individuals' own outcomes such as luck and sense of control.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SAFE Working Paper ; No. 301

Classification and Topics

• Classification: Wirtschaft ; Portfolio Choice; Investment Decisions ; Household Saving; Personal Finance ; Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets‡
• Subject: COVID-19 ; Risk taking ; Beliefs ; Formative experiences ; Expectations ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bu, Di ; Hanspal, Tobin ; Liao, Yin ; Liu, Yong
• Event: Veröffentlichung
• (who): Leibniz Institute for Financial Research SAFE
• (where): Frankfurt a. M.
• (when): 2021

Further information

• DOI: doi:10.2139/ssrn.3559870
• Handle: http://hdl.handle.net/10419/228784
• Last update: 10.03.2025, 11:44 AM CET