Intertemporal Preferences during the Covid-19 Pandemic. Analysis of Preference Shocks

Table of Contents

1. Introduction

2. Theoretical Background and Hypotheses

3. Time Preference - Literature Review

4. Method

4.1. Survey design

4.2. Time preference measure

4.3. Risk preference measure

4.4. Measuring affectedness

4.4.1. Level of Affectedness

4.4.2. PANAS

4.5. Participants

5. Results

5.1. Sample Description

5.2. Time preference

5.3. Risk preference

5.4. Level of Affectedness

5.5. PANAS

5.6. Regression Analysis

6. Discussion and Conclusion

7. References

8. Appendix

Research Objectives and Key Topics

This thesis examines the impact of the Covid-19 pandemic on individual time preferences, specifically investigating whether individuals more heavily affected by the pandemic and its consequences display higher levels of impatience (higher discount rates) than those less affected.

• Analysis of time preferences and intertemporal decision-making during the global pandemic.
• Evaluation of "preference shocks" caused by exogenous factors like the Covid-19 lockdown.
• Methodological assessment of affectedness using a multi-level classification framework.
• Measurement of individual risk aversion and emotional states (PANAS) as control variables.
• Regression analysis to test the correlation between pandemic-related stress and impatience.

Excerpt from the Book

Summary of Chapters

1. Introduction: Presents the motivation for the study, highlighting the impact of the Covid-19 pandemic on uncertainty and decision-making, and outlines the research objective.

2. Theoretical Background and Hypotheses: Reviews economic and behavioural theory regarding how external shocks influence individual preferences and develops the core hypothesis (H1).

3. Time Preference - Literature Review: Discusses the fundamentals of intertemporal choices, the discounted utility model, and various factors influencing patience, such as foresight and visceral factors.

4. Method: Describes the design of the incentivized online survey, including the Monetary-Choice Questionnaire, risk preference tasks, and the development of the "Level of Affectedness" framework.

5. Results: Details the demographic makeup of the sample and presents the statistical findings from the survey, including histograms and the regression analysis results.

6. Discussion and Conclusion: Interprets the findings regarding the correlation between pandemic affectedness and discount rates, acknowledges limitations, and suggests future research directions.

7. References: Lists all academic literature and sources cited throughout the thesis.

8. Appendix: Provides supplementary data, including anxiety scores, regression assumptions, and additional analysis on education and financial specialization.

Keywords

pandemic, time preference, preference shocks, covid-19, impatience, discount rate, economic uncertainty, behavioral economics, lockdown, risk aversion, survey, intertemporal choice, affectedness, social consequences, regression analysis

Frequently Asked Questions

What is the core objective of this bachelor thesis?

The thesis aims to determine if there is a correlation between the degree to which individuals were affected by the Covid-19 pandemic and their individual time preferences, specifically testing if higher affectedness leads to higher impatience.

What are the primary thematic areas covered?

The research covers behavioral economics, specifically time discounting and intertemporal choice, the impact of exogenous shocks (like natural disasters or pandemics) on preferences, and the measurement of psychological effects during the 2020 lockdown.

What is the main research question or hypothesis?

The central hypothesis (H1) states that people who are more affected by the Covid-19 pandemic display higher individual discount rates compared to those who are less affected.

Which scientific methods were employed?

The author conducted an incentivized online survey using the Monetary-Choice Questionnaire (Kirby et al., 1999) to measure time preferences and the Holt & Laury (2002) method for risk preferences, followed by OLS regression analysis.

What does the main body of the work focus on?

The main body integrates theoretical foundations with empirical methods. It reviews literature on preference changes, details the survey construction and incentivization, and performs a systematic analysis of the data collected from 379 participants.

Which keywords best characterize this work?

Key terms include pandemic, time preference, preference shocks, covid-19, discount rate, and behavioral economics.

How was the "Level of Affectedness" defined and measured?

The author constructed a 5-point scale based on specific criteria such as testing positive, having close contacts in the hospital, loss of income, quarantine requirements, and self-reported fear of the virus.

Did the study find a significant impact of education or finance specialization?

No, the additional analyses regarding hypotheses H2 (education) and H3 (finance specialization) found no statistically significant difference in discount rates between the groups, failing to support those specific hypotheses.

What were the main findings regarding the relationship between Covid-19 and risk aversion?

The study found only a weak correlation between the Level of Affectedness and risk aversion (RA), suggesting that pandemic affectedness may primarily influence time preferences rather than risk preferences in this sample.