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A behavioral economic risk aversion experiment in the context of the COVID-19 pandemic

Author

Listed:
  • Bruno Kluwe-Schiavon
  • Thiago Wendt Viola
  • Lucas Poitevin Bandinelli
  • Sayra Catalina Coral Castro
  • Christian Haag Kristensen
  • Jaderson Costa da Costa
  • Rodrigo Grassi-Oliveira

Abstract

We investigated what degree of risk of infection with COVID-19 is necessary so that people intend to stay home, even when doing so means losing their salary. We conducted an online survey across Brazil during the initial outbreak, in which 8,345 participants answered a questionnaire designed to identify the maximum tolerated risk (k’) necessary for them to disregard social distancing recommendations and guarantee their salaries. Generalized linear mixed models, path analysis structural equation, and conditional interference classification tree were performed to further understand how sociodemographic factors impact k’ and to establish a predictive model for the risk behavior of leaving home during the pandemic. We found that, on average, people tolerate 38% risk of infection to leave home and earn a full salary, but this number decreased to 13% when the individual risk perception of becoming ill from severe acute respiratory syndrome coronavirus-2 is considered. Furthermore, participants who have a medium-to-high household income and who are older than 35 years are more likely to be part of the risk-taking group who leave home regardless of the potential COVID-19 infection level; while participants over 45 years old and with good financial health are more likely to be part of the risk-averse group, who stay home at the expense of any salary offered. Our findings add to the political and public debate concerning lockdown strategies by showing that, contrary to supposition, people with low socioeconomic status are not more likely to ignore social distancing recommendations due to personal economic matters.

Suggested Citation

  • Bruno Kluwe-Schiavon & Thiago Wendt Viola & Lucas Poitevin Bandinelli & Sayra Catalina Coral Castro & Christian Haag Kristensen & Jaderson Costa da Costa & Rodrigo Grassi-Oliveira, 2021. "A behavioral economic risk aversion experiment in the context of the COVID-19 pandemic," PLOS ONE, Public Library of Science, vol. 16(1), pages 1-20, January.
  • Handle: RePEc:plo:pone00:0245261
    DOI: 10.1371/journal.pone.0245261
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    References listed on IDEAS

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    1. Anderson, Lisa R. & Mellor, Jennifer M., 2008. "Predicting health behaviors with an experimental measure of risk preference," Journal of Health Economics, Elsevier, vol. 27(5), pages 1260-1274, September.
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    Cited by:

    1. Roee Sarel, 2022. "Crime and punishment in times of pandemics," European Journal of Law and Economics, Springer, vol. 54(2), pages 155-186, October.
    2. Sanmay Shelat & Oded Cats & Sander van Cranenburgh, 2021. "Traveller behaviour in public transport in the early stages of the COVID-19 pandemic in the Netherlands," Papers 2104.10973, arXiv.org, revised Apr 2022.
    3. Shelat, Sanmay & Cats, Oded & van Cranenburgh, Sander, 2022. "Traveller behaviour in public transport in the early stages of the COVID-19 pandemic in the Netherlands," Transportation Research Part A: Policy and Practice, Elsevier, vol. 159(C), pages 357-371.
    4. Henrike Sternberg & Janina Isabel Steinert & Tim Büthe, 2024. "Compliance in the public versus the private realm: Economic preferences, institutional trust and COVID‐19 health behaviors," Health Economics, John Wiley & Sons, Ltd., vol. 33(5), pages 1055-1119, May.
    5. Castillo, Jose Gabriel & Hernandez, Manuel A., 2023. "The unintended consequences of confinement: Evidence from the rural area in Guatemala," Journal of Economic Psychology, Elsevier, vol. 95(C).

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