Staff Reports
Risk Preferences at the Time of COVID-19: An Experiment with Professional Traders and Students
Number 927
May 2020

JEL classification: D81, D91, N0

Authors: Marco Angrisani, Marco Cipriani, Antonio Guarino, Ryan Kendall, and Julen Ortiz de Zarate Pina

We study whether the COVID-19 pandemic has impacted risk preferences, comparing the results of experiments conducted before and during the outbreak. In each experiment, we elicit risk preferences from two sample groups: professional traders and undergraduate students. We find that, on average, risk preferences have remained constant for both pools of participants. Our results suggest that the increases in risk premia observed during the pandemic are not due to changes in risk appetite; rather, they are solely due to a change in beliefs by market participants. The findings of our paper support the traditional view that, at least on average, risk preferences are not affected by economic or social circumstances.

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AUTHOR DISCLOSURE STATEMENT(S)
Marco Angrisani
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.

Marco Cipriani
The author declares that he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.

Antonio Guarino
I declare that I have no relevant or material financial interests that relate to the research described in this paper.

Ryan Kendall
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.

Julen Ortiz de Zarate Pina
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.