Document Type

Article

Publication Date

8-20-2020

Abstract

We examine how the emergence of Covid-19 in Wuhan, and the ramifications of associated events, influence pro-sociality, trust and attitudes towards risk and ambiguity. We assess these influences using an experiment consisting of financially incentivized economic tasks. We establish causality via the comparison of a baseline sample collected pre-epidemic with five sampling waves starting from the imposition of a stringent lock- down in Wuhan and completed six weeks later. We find significant long-term increases - measured as the difference between the baseline and final wave average responses - in altruism, cooperation, trust and risk tolerance. Participants who remained in Wuhan during the lockdown exhibit lower trust and cooperation relative to other participants. We identify transitory effects from two events that permeated the public psyche. First, in the immediate aftermath of the Wuhan lockdown, there is a decrease in trust and an increase in ambiguity aversion. Second, the news of a high-profile whistleblower's death also decreases trust while heightening risk aversion.

Comments

ESI Working Paper 20-33

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