Social Preferences and Economic Decision-Making in the Wake of COVID-19: Experimental Evidence from China

Abstract

We systematically examine the acute impact of exposure to a public health crisis on multiple dimensions of economic decision making and social preferences using unique experimental panel data collected just before and immediately after the outbreak of COVID-19 in China. Exploiting the geographical variation in virus prevalence and unique dataset of longitudinal experiments, we show that while social and economic preferences are largely stable, participants who were more intensely exposed to the virus became more anti-social than those with lower exposure. The effect is particularly pronounced for individuals who experienced an increase in depression or negative affect, which highlights the important role of psychological health as a potential pathway through which the virus outbreak affects behaviour. Our results have important policy implications, as pro-sociality is likely to affect how individuals adopt measures to protect themselves from COVID-19 and comply with public policy limiting its further spread.