Risk Aversion, Guilt, and Pandemic Behavior

Abstract

We test whether laboratory measures of individual preferences for risk and guilt relate to risk-connected behaviors in a pandemic, such as socializing, dining in at restaurants, and hand washing. We also investigate how guilt and risk aversion relate to the impact of governmental shelter-in-place orders. We utilize a survey administrated to a nationally representative subject pool in the United States in April, 2020 - the month following the declaration of a national state of emergency in response to the global outbreak of a coronavirus named SARS-CoV-2 (COVID-19). We find that higher levels of risk aversion and guilt are associated with risk-reducing behaviors during the COVID-19 pandemic. We also find evidence that state and local shelter-in-place orders influenced some behavior, but the response of risk averse and guilty individuals is independent of the timing of local executive orders.

Keywords: COVID, pandemic, risk aversion, inequality aversion, guilt, experiment

JEL Classification: D9, I12, I18