Two clusters with low and high FRT were identified before and after pandemic.
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The proportion of low FRT cluster increases after pandemic, vice-versa to high FRT cluster.
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On the contrary, the pandemic moves the average FRT score across the sample higher.
Abstract
This paper documents the negative effect of the COVID-19 pandemic on financial risk attitudes across a broad sample of financial decision makers (N = 18,913). Findings show that the risk tolerance of financial decision makers can be altered when an extreme economic, social, or environmental shock occurs. A general shift away from be willing to take financial risk was noted after the COVID-19 pandemic emergency declaration. The COVID-19 pandemic shifted risk preference downward for the majority of financial decision makers in this study.
