Household Financial Decision Making Amidst the COVID-19 Pandemic

Document Type

Article

Source

Emerging Markets Finance and Trade

Publication Date

7-25-2020

ISSN

1558-0938

Issue

10 (Special Issue: Research on Pandemics)

Last Page

2363

Abstract

This paper investigates the impact of the COVID-19 pandemic on household investment decisions using a novel survey conducted by the Survey and Research Center for China Household Finance. We use linear probability and probit models to analyze the effects of COVID-19 at the household level. Our results show that households who know someone infected with COVID-19 lose confidence in the economy. They are more likely to change their risk behavior and become risk-averse. Further, COVID-19 increases the probability that a household will change its investment portfolio. More specifically, it causes a 9.15% decrease in the total investment amount.

Rights

Copyright Taylor & Francis Group, LLC

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