Preference Shifts During Health Shocks: Foreign Tourists' Expenditure-Price Elasticity Throughout the Pandemic

This study evaluates the changes in the expenditure-price elasticities of foreign tourists in the summer periods of 2019, 2020, and 2021. We first develop a theoretical characterization that combines microeconomic, loss aversion, price inequality and precautionary savings theories. Next, exploiting microdata for more than 34,000 foreign tourists visiting Spain, we estimate OLS and quantile regressions to empirically examine the expenditure elasticities with respect to the prices of transport services, leisure activities and bars and restaurants at the destination (17 regions). We find that (i) the expenditure-price elasticity of transportation (leisure activities) increases (decreases) during the pandemic, whereas that of bars and restaurants remains unchanged, (ii) foreign tourists are comparatively less expenditure-price elastic at high expenditure levels in transportation and bars and restaurants, and (iii) expenditure-price elasticities are highly heterogeneous depending on the origin country. Managerial and theoretical implications of the findings for firms' pricing strategies are discussed.

The relationship between the psychological distress derived from COVID-19 and the loss aversion is modulated by the alexithymia trait

studies on stress and decision-making usually address acute and artificial stressors. However, COVID-19 outbreak set the perfect scena-rio to address how decision-making, and specifically loss aversion, could be affected by a real and persistent stressor, able to promote a significant psychological distress. In parallel, alexithymia has been identified as a potential moderator of the loss aversion expression, since it could impair the incorporation of emotional information when making a decision, leading to "cold" decisions. Through a within-subjects design (N = 70), our aim was to study the relationship between the psychological distress caused by the pandemic context and the loss aversion changes, considering alexithymia as a moderating factor. Our results show a significant increment in both psychological distress and loss aversion, merely one month after the confinement's onset. Moreover, both variables were positively associated only when alexithymia was low, i.e., the alexithymia buffered the effect of psychological distress on decision-making: a higher alexithymia implied a lower loss aversion increase.

Disposition Effect: Brazilian Investors' Behavior during the Covid-19 Pandemic

This study investigates the disposition effect with regard to Brazilian investors, with focus on the year 2020. The database is composed by more than 12,000 trades by 274 investors. We follow the method of Odean (1998) to estimate the proportions of gains and losses realized and test the null hypothesis of equality of these proportions in each portfolio. The results suggest that Brazilian investors behave in line with the disposition effect. They sell winning stocks too early and hold losing stocks too long. A stock that is gaining value is more likely to be sold from day to day compared to a stock that is losing value. The disposition effect was not found in March, which suggests that investors employed a loss-limit during periods of market stress, no matter if the stock went up or down. © 2023 FUCAPE Business School. All rights reserved.

Loss aversion or hand-to-mouth behaviour in private consumption models

This study empirically tests whether the loss aversion or hand-to-mouth theories of consumption behaviour is present in Fiji. The loss aversion hypothesis implies that consumers would maintain their consumption when income falls. To estimate this model, we apply the nonlinear autoregressive distributed lag model with annual data from 1981 to 2019. Our findings are in contrast to the predictions of the loss aversion hypothesis and support the hand-to-mouth hypothesis in Fiji. The results are robust to alternative measures of liquidity, and a sample that includes the COVID-19 pandemic. We contribute to the literature by providing evidence of nonlinearity's in the consumption-income association. The findings are useful for policymakers in developing countries for policies on economic growth and stabilization. © 2023 New Zealand Association of Economists Incorporated.

Partisanship and Fear are Associated with Resistance to COVID-19 Directives

Ideological differences have had a large impact on individual and community response to the COVID-19 pandemic in the United States. Early behavioral research during the pandemic showed that conservatives were less likely to adhere to health directives, which contradicts a body of work suggesting that conservative ideology emphasizes a rule abiding, loss aversion, and prevention focus. We reconcile this contradiction by analyzing semantic content of local press releases, federal press releases, and localized tweets during the first month of the government response to COVID-19 in the United States. Controlling for factors such as COVID-19 confirmed cases and deaths, local economic indicators, and more, we find that online expressions of fear in conservative areas lead to an increase in adherence to public health recommendations concerning COVID-19, and that expressions of fear in government press releases are a significant predictor of expressed fear on Twitter. © 2021 Association for Computational Linguistics.

Do Investor Overconfidence and Loss Aversion Drive Saudi Firm Market Performance? The Moderating Effect of Corporate Governance

sThis study investigated the impact of investor psychological bias on a firm’s market value. In detail, we examined the effect of investor overconfidence (optimism) and loss aversion (pessimism) on firm market value. We also aimed to investigate the moderating effect of corporate governance on the relationship between investor behavior biases and firm market value. This study used a sample of 143 firms listed on the Saudi Stock Exchange over the period from 2012 to 2021. The results suggest that investor overconfidence affects a firm’s value positively. On the other hand, loss aversion is negatively associated with the firm’s market value. Furthermore, we find that corporate governance (measured by board size and board independence) enhances the positive association between overconfidence and firm market value. In contrast, we find that corporate governance seems to marginally mitigate the negative effect of loss aversion.

Long-term changes in consumers' shopping behavior post-pandemic: an exploratory study

Purpose Short-term changes in consumers' shopping behaviour due to the Covid-19 pandemic have been studied, but not the long-term effects. This study fills this gap by exploring the long-term changes in consumers' retail shopping behaviour, due to their experiences of the Covid-19 pandemic. Design/methodology/approach Qualitative data were collected from one hundred fifty-nine respondents, and grounded theory approach was applied for interpretation. Gioia thematic analysis method, open coding, and axial coding were used for analysis. Findings Individuals who positively approached their experiences during the Covid-19 demonstrated increased pro-sustainable and pro-environmental self-identity, resulting in sustainable consumption and a shift to online shopping. Individuals having overpowering negative experiences demonstrated heightened fear of missing out (FOMO), loss aversion, and rumination. While shopping, they demonstrated herd behaviour and shifted to online shopping. Research limitations/implications This study highlights emotional and psychological mechanisms influencing long-term changes in consumer shopping preferences post Covid-19 pandemic. The generalizability of the findings is limited due to the study's exploratory nature and the sample size. Originality/value This study contributes to shopping behaviour literature by uncovering novel constructs of self-identity, loss aversion, FOMO, and rumination as antecedents to long-term shopping behaviour changes post-Covid-19. It provides a new conceptual model of consumers' shopping behaviour, which may be empirically validated.

Framing policies to mobilize citizens' behavior during a crisis: Examining the effects of positive and negative vaccination incentivizing policies

The COVID-19 pandemic has highlighted the issue of mobilization policies, that is, government practices directed at making the mass public voluntarily perform various behaviors for the collective benefit during a crisis. As COVID-19 vaccinations became accessible, governments faced the challenge of mass vaccination mobilization in order to achieve herd immunization. Aiming to effectively realize this goal, policy designers and regulators worldwide considered various mobilizing tools for vaccination compliance, including rewards and penalties, as they targeted vaccine opposers and hesitators, while trying to avoid the crowding-out effect among individuals who were intrinsically motivated to get vaccinated. However, the unique circumstances of the Coronavirus pandemic may have eliminated the crowding-out effect. Thus, our study explored the effect of regulation in the form of positive and negative incentivizing tools (i.e., rewards and penalties) during the coronavirus pandemic on vaccination intentions of 1184 Israeli citizens, prior to the national vaccination campaign. Results indicate that (1) both negative and positive incentives have a similar positive effect on individuals who declare they will not get vaccinated and those who hesitate to get the shot;(2) both positive and negative incentives induce the crowding-out effect;and (3) negative incentives generate a larger crowding-out effect in individuals who report preliminary intentions to get vaccinated, compared to positive ones. This emphasizes the need to avoid the crowding-out effect during the current and similar crises, and suggests considering applying a gradual and adaptive policy design in order to maximize regulatory efficacy and compliance.

Addressing threats like Covid: why we will tend to over-react and how we can do better

A number of behavioral economic insights suggest we will tend to overreact, individually and collectively, to a new, serious, but low probability health threat, like Covid 19. To respond more effectively to such threats, we should recognize why we will tend to overreact and prepare in advance not to do so. We also should recognize the usefulness in giving lower level governments, non-profits, and less formal communities some ability to respond, rather than presuming we should address a significant threat like Covid using the highest level of government.

Behavioural interventions for micro-mobility adoption: Low-hanging fruits or hard nuts to crack?

This study explores the potential and challenges of applying behavioural interventions to promote micro-mobility adoption. Our online experiments with New York City residents showed that nudges and faming improved respondents’ willingness to adopt e-scooters significantly. Moreover, our experiments spanned over the pre-, during- and post- COVID-19 lockdown period in New York City. Findings from this natural experiment revealed that the effect of these behavioural interventions varied significantly during the pandemic, likely due to a heightened level of health consciousness and a new perspective regarding social interactions. Behavioural tools cannot be taken off-the-shelf and applied as a blanket policy. Individual and group characteristics have to be assessed to devise the pre-eminent behavioural interventions for a particular target audience. More experiments across a wide range of economic, social, cultural, and political settings are needed to guide the application of behavioural interventions in transportation studies. © 2021 Elsevier Ltd

Risk and loss preference change before and during the COVID-19 pandemic

It is long believed that people's preferences are relatively stable over time. However, this study utilized a survey to directly elicit people's preference after experiencing COVID-19 pandemic. The study finds that those who have been heavily impacted by the pandemic, such as experiencing negative monetary effects, become more risk-averse when facing an uncertain gain while also become more risk-loving when encountering an uncertain loss. A model was used to demonstrate that this finding is inconsistent with the classic utility function with single risk parameter. However, it is consistent with the behavioral model of risk-aversion across gain and loss domains. Furthermore, other findings indicate that people becoming less loss-averse over the months of the pandemic yet the data also shows the participants becoming less willing to take financial and health risks. It was found that several demographic variables closely relate to people's risk-preference and loss-aversion. This finding offers new implications and future research possibilities as it points out people's preference might not be as stable as usually assumed in classical models. © 2021 ACM.

Loss aversion fails to replicate in the coronavirus pandemic: Evidence from an online experiment.

Loss aversion is a foundational bias and is a natural choice for interventions encouraging compliance during COVID-19. We compare the effectiveness of loss and gain messages and find no difference in the intention to comply with guidance or lockdown beliefs.