Measures taken to slow the spread of COVID-19, such as social distancing and ?stay-at-home? orders have generated the fear of income and employment losses in addition to possibility of the individual, friends and family getting infected. COVID-19 therefore increases burdens on mental well-being and stress levels. Such increased stress levels affect individuals? decision-making in risky environments, choices over time-dated payments, willingness to donate to charities, and honesty when provided the opportunity to cheat for personal gain. The increased stress levels can impact preferences and choices and a range of outcomes such as health, borrowing and savings, and human capital formation. It therefore has long-term consequences for individual well-being. This research project will use survey and field experiments to study the impact of COVID-19. Specifically, it investigates three questions: (i) What are the effects of COVID-19 on stress, mental and physical health, and preferences? (ii) Do individuals believe in the effectiveness of strategies to slow the spread of COVID-19 and do individuals have confidence in institutions responsible for these strategies? and (iii) What are the welfare effects of the COVID-19 pandemic? In addition, how much money or how many years of life would individuals give up in order to avoid exposure to a future pandemic similar to COVID-19? The results of this study have important policy implications for strategies to reduce the spread of, as well as reducing the effects of COVID-19 on the welfare of households. This research also will help establish the US as the global leader in policies to reduce the effects of pandemics on households.
This project uses a survey and field experiment, built on an existing project, to study the impact of COVID-19 induced stress on economic preferences and decision-making. The survey has several unique features that allows the PIs to quantify non-monetary costs of COVID-19. The survey measures how exposure to COVID-19 affects self-reported levels of stress, life satisfaction, and mental well-being. In addition, the field experiment elicits individual specific measures of time and risk preference, honesty, and pro-social/altruistic behavior, to examine whether and how stress induced by COVID-19 affects economic preferences and decision-making. The study will compare the effects of COVID-19, which may affect both stress and income through changes in employment, to the effects of traffic and congestion, which impact stress, but not income. Results from the study will inform the on-going debate on stability of preferences and how preferences respond to temporary shocks, such as the COVID-19 pandemic. The results will also provide important inputs into policy formulation and implementation to reduce the spread of, as well as mitigate the welfare effects of COVID-19. The research will provide insights into which organizations are most trusted during a national crisis, and therefore guide information strategies to prevent the spread of pandemics. This research also will help establish the US as the global leader in policies to reduce the effects of pandemics on households.
This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.
