Economic Preferences and the Local Coronavirus Pandemic

68 Pages Posted: 25 Oct 2021

See all articles by Raymond M. Duch

Raymond M. Duch

Nuffield College University of Oxford

Peiran Jiao

Maastricht University - Department of Finance

Thomas Robinson

Durham University

Date Written: October 23, 2021

Abstract

Early in the pandemic, individuals in numerous countries experienced quite different rates of COVID-19 infections and deaths dependent on where they lived. This within-country variation offers an opportunity to study how the intensity of a catastrophic shock to systems affects individuals’ economic preferences – a topic without consensus in the literature. In April 2020, we conducted an online survey with approximately 1500 subjects in China, 800 in Chile, and 800 in Italy. Our sampling strategy deliberately sampled subjects with exposure to different levels of local COVID-19 infections. We find that respondents condition their behavior and economic preferences on this intensity – levels of COVID-19 preventive behavior are correlated with the intensity of community infections; exposure to intense infection rates correlates, positively, with risk aversion and patience; and, negatively, with other-regarding preferences. Using machine-learning to estimate individual-level effects, we find notable effect heterogeneity with respect to education levels. Finally, using multilevel regression and poststratification (MRP) we demonstrate province-level estimates of economic preferences for 107 Italian provinces.

Keywords: COVID-19, preferences, beliefs, survey

JEL Classification: C83, D81, I18

Suggested Citation

Duch, Raymond M. and Jiao, Peiran and Robinson, Thomas, Economic Preferences and the Local Coronavirus Pandemic (October 23, 2021). Available at SSRN: https://ssrn.com/abstract=3948756 or http://dx.doi.org/10.2139/ssrn.3948756

Raymond M. Duch

Nuffield College University of Oxford ( email )

New Road
Oxford, OX1 1NF
United Kingdom

Peiran Jiao (Contact Author)

Maastricht University - Department of Finance ( email )

Maastricht, 6200 MD
Netherlands

Thomas Robinson

Durham University ( email )

Durham, DH1 3LE
Great Britain

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