Social Preferences and Economic Decision-Making in the Wake of COVID-19: Experimental Evidence from China

62 Pages Posted: 11 Oct 2020 Last revised: 11 May 2021

See all articles by Paul Lohmann

Paul Lohmann

Cambridge Centre for Environment, Energy and Natural Resource Governance (C-EENRG), Department of Land Economy, University of Cambridge

Elisabeth Gsottbauer

Institute of Public Finance, Department of Economics and Statistics, University of Innsbruck

Jing You

Renmin University of China

Andreas Kontoleon

University of Cambridge

Date Written: October 5, 2020

Abstract

We systematically examine the acute impact of exposure to a public health crisis on multiple dimensions of economic decision making and social preferences using unique experimental panel data collected just before and immediately after the outbreak of COVID-19 in China. Exploiting the geographical variation in virus prevalence and unique dataset of longitudinal experiments, we show that while social and economic preferences are largely stable, participants who were more intensely exposed to the virus became more anti-social than those with lower exposure. The effect is particularly pronounced for individuals who experienced an increase in depression or negative affect, which highlights the important role of psychological health as a potential pathway through which the virus outbreak affects behaviour. Our results have important policy implications, as pro-sociality is likely to affect how individuals adopt measures to protect themselves from COVID-19 and comply with public policy limiting its further spread.

Keywords: Coronavirus, COVID-19, Risk Preferences, Time Preferences, Anti-social Behaviour, Natural Experiment, Panel Data, Social Media Data

JEL Classification: C93, D64, D81, D91, I18

Suggested Citation

Lohmann, Paul and Gsottbauer, Elisabeth and You, Jing and Kontoleon, Andreas, Social Preferences and Economic Decision-Making in the Wake of COVID-19: Experimental Evidence from China (October 5, 2020). Available at SSRN: https://ssrn.com/abstract=3705264 or http://dx.doi.org/10.2139/ssrn.3705264

Paul Lohmann

Cambridge Centre for Environment, Energy and Natural Resource Governance (C-EENRG), Department of Land Economy, University of Cambridge ( email )

Elisabeth Gsottbauer

Institute of Public Finance, Department of Economics and Statistics, University of Innsbruck ( email )

Universitätsstrasse 15
Innsbruck, 6020
Austria

Jing You (Contact Author)

Renmin University of China ( email )

Room B906
Xianjin Building
Beijing, Beijing 100872
China

Andreas Kontoleon

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

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