Risk taking, preferences, and beliefs: evidence from Wuhan

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 exp
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. 

JEL Classification: G50, G51, G11, D14, G41
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Metadaten
Author:Di Bu, Tobin Hanspal, Yin Liao, Yong Liu
URN:urn:nbn:de:hebis:30:3-573938
DOI:http://dx.doi.org/10.2139/ssrn.3559870
Parent Title (English):SAFE working paper ; No. 301
Series (Serial Number):SAFE working paper series (301)
Publisher:SAFE
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2021
Year of first Publication:2021
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2021/01/27
Tag:Beliefs; COVID-19; China; Expectations; Formative experiences; Risk taking
Issue:December, 2020
Pagenumber:62
Institutes:Wirtschaftswissenschaften
House of Finance (HoF)
Center for Financial Studies (CFS)
Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:330 Wirtschaft
JEL-Classification:D14 Personal Finance
G11 Portfolio Choice; Investment Decisions
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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