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The Impact of the COVID-19 Crisis on Individuals' Risk and Time Preferences

Risk-taking and time preferences of the people could change over time and particularly with crises like COVID-19. In this study, we compared people’s risk and time preferences before Covid and one year after the first vague of Covid. We observe a significant increase in loss aversion and a decrease in present bias reflecting a more cautious behavior on average. The effect however is not the same for everyone. Mainly individuals with negligible tangible assets, no children, and relatively older, became more cautious as a result of Covid.



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