IDEAS home Printed from https://ideas.repec.org/a/eee/socmed/v334y2023ics0277953623005269.html
   My bibliography  Save this article

Risk preferences, preventive behaviour, and the probability of a loss: Empirical evidence from the COVID-19 pandemic

Author

Listed:
  • Kalwij, Adriaan

Abstract

A theoretical model of optimal choice under risk, in which an individual chooses the level of prevention to avoid a loss, has the ambiguous prediction that a higher risk-taking preference increases the probability of a loss.

Suggested Citation

  • Kalwij, Adriaan, 2023. "Risk preferences, preventive behaviour, and the probability of a loss: Empirical evidence from the COVID-19 pandemic," Social Science & Medicine, Elsevier, vol. 334(C).
    • Handle: RePEc:eee:socmed:v:334:y:2023:i:c:s0277953623005269
    DOI: 10.1016/j.socscimed.2023.116169
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0277953623005269
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.socscimed.2023.116169?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Louis Eeckhoudt & Liqun Liu & Jack Meyer, 2017. "Restricted increases in risk aversion and their application," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(1), pages 161-181, June.
    2. Bruno Jullien & Bernard Salanié & François Salanié, 1999. "Should More Risk-Averse Agents Exert More Effort?," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 24(1), pages 19-28, June.
    3. Daniel J. Benjamin & James O. Berger & Magnus Johannesson & Brian A. Nosek & E.-J. Wagenmakers & Richard Berk & Kenneth A. Bollen & Björn Brembs & Lawrence Brown & Colin Camerer & David Cesarini & Chr, 2018. "Redefine statistical significance," Nature Human Behaviour, Nature, vol. 2(1), pages 6-10, January.
      • Daniel Benjamin & James Berger & Magnus Johannesson & Brian Nosek & E. Wagenmakers & Richard Berk & Kenneth Bollen & Bjorn Brembs & Lawrence Brown & Colin Camerer & David Cesarini & Christopher Chambe, 2017. "Redefine Statistical Significance," Artefactual Field Experiments 00612, The Field Experiments Website.
    4. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    5. Louis Eeckhoudt & Rachel J. Huang & Larry Y. Tzeng, 2012. "Precautionary Effort: A New Look," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 79(2), pages 585-590, June.
    6. Dionne, Georges & Eeckhoudt, Louis, 1985. "Self-insurance, self-protection and increased risk aversion," Economics Letters, Elsevier, vol. 17(1-2), pages 39-42.
    7. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    8. Armin Falk & Anke Becker & Thomas Dohmen & David Huffman & Uwe Sunde, 2023. "The Preference Survey Module: A Validated Instrument for Measuring Risk, Time, and Social Preferences," Management Science, INFORMS, vol. 69(4), pages 1935-1950, April.
    9. Arslan, Ruben C. & Brümmer, Martin & Dohmen, Thomas & Drewelies, Johanna & Hertwig, Ralph & Wagner, Gert G., 2020. "How people know their risk preference," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 10.
    10. José Luis Montiel Olea & Carolin Pflueger, 2013. "A Robust Test for Weak Instruments," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 31(3), pages 358-369, July.
    11. Magda Tsaneva, 2013. "The Effect of Risk Preferences on Household Use of Water Treatment," Journal of Development Studies, Taylor & Francis Journals, vol. 49(10), pages 1427-1435, October.
    12. Gary Charness & Thomas Garcia & Theo Offerman & Marie Claire Villeval, 2020. "Do measures of risk attitude in the laboratory predict behavior under risk in and outside of the laboratory?," Journal of Risk and Uncertainty, Springer, vol. 60(2), pages 99-123, April.
    13. Richard Peter, 2021. "Who should exert more effort? Risk aversion, downside risk aversion and optimal prevention," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1259-1281, June.
    14. Kimball, Miles S & Sahm, Claudia R & Shapiro, Matthew D, 2008. "Imputing Risk Tolerance From Survey Responses," Journal of the American Statistical Association, American Statistical Association, vol. 103(483), pages 1028-1038.
    15. Louis Eeckhoudt & Christian Gollier, 2005. "The impact of prudence on optimal prevention," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 989-994, November.
    16. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David B. Huffman & Uwe Sunde, 2017. "Global Evidence on Economic Preferences," NBER Working Papers 23943, National Bureau of Economic Research, Inc.
    17. Verschoor, Arjan & D’Exelle, Ben & Perez-Viana, Borja, 2016. "Lab and life: Does risky choice behaviour observed in experiments reflect that in the real world?," Journal of Economic Behavior & Organization, Elsevier, vol. 128(C), pages 134-148.
    18. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2018. "Global Evidence on Economic Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(4), pages 1645-1692.
    19. Decker, Simon & Schmitz, Hendrik, 2016. "Health shocks and risk aversion," Journal of Health Economics, Elsevier, vol. 50(C), pages 156-170.
    20. Müller, Stephan & Rau, Holger A., 2021. "Economic preferences and compliance in the social stress test of the COVID-19 crisis," Journal of Public Economics, Elsevier, vol. 194(C).
    21. Jonathan P. Beauchamp & David Cesarini & Magnus Johannesson, 2017. "The psychometric and empirical properties of measures of risk preferences," Journal of Risk and Uncertainty, Springer, vol. 54(3), pages 203-237, June.
    22. James K Hammitt & Kevin Haninger & Nicolas Treich, 2009. "Effects of Health and Longevity on Financial Risk Tolerance," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 34(2), pages 117-139, December.
    23. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    24. Bonsang, Eric & Dohmen, Thomas, 2015. "Risk attitude and cognitive aging," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 112-126.
    25. Cipriani, Marco & Angrisani, Marco & Guarino, Antonio & Kendall, Ryan & Ortiz de Zarate Pina, Julen, 2020. "Risk Preferences at the Time of COVID-19: An Experiment with Professional Traders and Students," CEPR Discussion Papers 15108, C.E.P.R. Discussion Papers.
    26. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843, Elsevier.
    27. Kapteyn, Arie & Teppa, Federica, 2011. "Subjective measures of risk aversion, fixed costs, and portfolio choice," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 564-580, August.
    28. Galizzi Matteo M. & Miraldo Marisa, 2017. "Are You What You Eat? Healthy Behaviour and Risk Preferences," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(1), pages 1-25, January.
    29. Finley, Brian & Kalwij, Adriaan & Kapteyn, Arie, 2022. "Born to be wild: Second-to-fourth digit length ratio and risk preferences," Economics & Human Biology, Elsevier, vol. 47(C).
    30. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-648, July-Aug..
    31. Christophe Courbage & Béatrice Rey, 2006. "Prudence and optimal prevention for health risks," Health Economics, John Wiley & Sons, Ltd., vol. 15(12), pages 1323-1327, December.
    32. Irene Mussio & Maximiliano Sosa Andrés & Abdul H Kidwai, 2023. "Higher order risk attitudes in the time of COVID-19: an experimental study," Oxford Economic Papers, Oxford University Press, vol. 75(1), pages 163-182.
    33. David Crainich & Louis Eeckhoudt & Mario Menegatti, 2019. "Vaccination as a trade-off between risks," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 5(3), pages 455-472, October.
    34. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 537-579.
    35. Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhou, Yan & Aoki, Keiko & Akai, Kenju, 2024. "Relationship between health behavior compliance and prospect theory-based risk preferences during a pandemic of COVID-19," China Economic Review, Elsevier, vol. 86(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Finley, Brian & Kalwij, Adriaan & Kapteyn, Arie, 2022. "Born to be wild: Second-to-fourth digit length ratio and risk preferences," Economics & Human Biology, Elsevier, vol. 47(C).
    2. Richard Peter, 2024. "The economics of self-protection," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 49(1), pages 6-35, March.
    3. Schneider, Sebastian O. & Sutter, Matthias, 2020. "Higher Order Risk Preferences: Experimental Measures, Determinants and Related Field Behavior," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224643, Verein für Socialpolitik / German Economic Association.
    4. Rafaï, Ismaël & Blayac, Thierry & Dubois, Dimitri & Duchêne, Sébastien & Nguyen-Van, Phu & Ventelou, Bruno & Willinger, Marc, 2023. "Stated preferences outperform elicited preferences for predicting reported compliance with COVID-19 prophylactic measures," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    5. Joshua Tasoff & Wenjie Zhang, 2022. "The Performance of Time-Preference and Risk-Preference Measures in Surveys," Management Science, INFORMS, vol. 68(2), pages 1149-1173, February.
    6. P. Battiston & M. Menegatti, 2022. "Interaction in Prevention: A General Theory and an Application to COVID-19 Pandemic," Economics Department Working Papers 2022-EP02, Department of Economics, Parma University (Italy).
    7. Thomas Mayrhofer & Hendrik Schmitz, 2020. "Prudence and prevention - Empirical evidence," Working Papers CIE 134, Paderborn University, CIE Center for International Economics.
    8. Mikko Vaaramo & Leena Ala-Mursula & Jouko Miettunen & Marko Korhonen, 2023. "Economic preferences and temperament traits among business leaders and paid employees," Small Business Economics, Springer, vol. 60(3), pages 1197-1217, March.
    9. Courbage, Christophe & Rey, Béatrice & Treich, Nicolas, 2013. "Prevention and precaution," TSE Working Papers 13-445, Toulouse School of Economics (TSE).
    10. Brunette, Marielle & Jacob, Julien, 2019. "Risk aversion, prudence and temperance: An experiment in gain and loss," Research in Economics, Elsevier, vol. 73(2), pages 174-189.
    11. Esteban J. Quiñones & Sabine Liebenehm & Rasadhika Sharma, "undated". "Left Home High and Dry-Reduced Migration in Response to Repeated Droughts in Thailand and Vietnam," Mathematica Policy Research Reports ac2ba236e1b8428fbeb6d8b43, Mathematica Policy Research.
    12. Nicolás Salamanca & Buly A. Cardak & Edwin Ip & Joe Vecci, 2023. "Time-stability of risk preferences: A new approach with evidence from developed and developing countries," Discussion Papers 2305, University of Exeter, Department of Economics.
    13. Breitkopf, Laura & Chowdhury, Shyamal K. & Priyam, Shambhavi & Schildberg-Hörisch, Hannah & Sutter, Matthias, 2020. "Do economic preferences of children predict behavior?," DICE Discussion Papers 342, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    14. Arslan, Ruben C. & Brümmer, Martin & Dohmen, Thomas & Drewelies, Johanna & Hertwig, Ralph & Wagner, Gert G., 2020. "How people know their risk preference," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 10.
    15. Armin Falk & Fabian Kosse & Pia Pinger & Hannah Schildberg-Hörisch & Thomas Deckers, 2021. "Socioeconomic Status and Inequalities in Children’s IQ and Economic Preferences," Journal of Political Economy, University of Chicago Press, vol. 129(9), pages 2504-2545.
    16. Adema, Joop & Nikolka, Till & Poutvaara, Panu & Sunde, Uwe, 2022. "On the stability of risk preferences: Measurement matters," Economics Letters, Elsevier, vol. 210(C).
    17. Mario Menegatti, 2014. "Optimal choice on prevention and cure: a new economic analysis," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(4), pages 363-372, May.
    18. Bernd Fitzenberger & Gary Mena & Jan Nimczik & Uwe Sunde, 2022. "Personality Traits Across the Life Cycle: Disentangling Age, Period and Cohort Effects," The Economic Journal, Royal Economic Society, vol. 132(646), pages 2141-2172.
    19. Paul Bokern & Jona Linde & Arno Riedl & Peter Werner, 2023. "The Robustness of Preferences during a Crisis: The Case of Covid-19," CESifo Working Paper Series 10595, CESifo.
    20. Michele Garagnani, 2023. "The predictive power of risk elicitation tasks," Journal of Risk and Uncertainty, Springer, vol. 67(2), pages 165-192, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:socmed:v:334:y:2023:i:c:s0277953623005269. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/315/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.