Pandemic Behavior: Economic Preferences and Perceptions regarding Covid-19

Abstract: n early spring 2020, Covid-19 spread around the world and dominated the media coverage. It acutely impacted the global economy as countries went into lockdown and health services struggled to administer the situation. The purpose of this thesis is to investigate the relationship between economic preferences and perceptions about Covid-19 and changes in consumption behavior. We argue that understanding these relationships can lead to a better understanding of behavioural effects of Covid-19 and potential future pandemics. Using a web-survey we elicit measures of risk attitude, altruism, reciprocity, trust and influence of media in a student sample. We also elicit measures on anxiety, subjective probabilities regarding the risks of Covid-19 and changes in consumption behavior. This study aims to answer a series of relevant research questions using different regression models. The results show that economic preferences are important predictors of perceptions regarding Covid-19 but seem to have no statistically significant effect on changes in consumption behavior. Higher risk tolerance and trust in government information are associated with lower levels of anxiety, while altruism and higher influence of media are associated with more anxiety. We also find strong relationship between different economic preferences and anxiety about medical and economic consequences, respectively. We find less conclusive evidence of the relationship between economic preferences and consumption behavior. Our results can be used to guide policymaking during pandemics to achieve a better coordination and cooperation in society.