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Measuring Risk and Time Preferences During the Emergence of the COVID-19 Crisis: Relation with Investment Behaviour

Presented at the IPRA Special Session on Pensions and COVID-19: The Global Experience

Measuring Risk and Time Preferences During the Emergence of the COVID-19 Crisis: Relation with Investment Behaviour

Speaker: Jorgo Goossens (Tilburg University, Department of Econometrics and Operations Research and Netspar)

Abstract: We measure preferences and trading behavior during the emergence of the COVID-19 crisis. Firstly, we elicit and estimate present bias, patience, risk aversion and probability weighting in a large panel with high stakes and long-decision horizons. Present bias and impatience increase during the emergence of the COVID-19 crisis, and we find less risk-averse behavior. Secondly, we measure individual trading behavior and observe a strong disposition effect, which is increasing in the volatility of returns. The experimentally elicited disposition effect correlates strongly with exogenous market returns and is higher during bearish days. Finally, trust in insurers increases during the emergence of the COVID-19 crisis.

About the speaker: I am Jorgo Goossens, a PhD candidate at the department of Econometrics & OR and a researcher at APG Asset Management. I hold academic degrees in econometrics, (teaching) mathematics and finance. My research areas cover behavioral finance, asset pricing, macro and experimental finance. I teach courses in the field of quantitative finance and risk preferences (business school), and I supervise theses.
I am awarded Industrial Doctorate funding from the Dutch Research Council NWO for my pension research both at Tilburg University and APG Asset Management. My PhD research project is: "Behavioral biases and individual heterogeneity in pensions: Household Asset Liability Management." I am supervised by Prof. Dr. B. Werker (Tilburg University), Prof. Dr. M. Knoef (Leiden University), Prof. Dr. E. Ponds (Tilburg University and APG Asset Management) and Dr. R. van den Goorbergh (APG Asset Management). My expected graduation date is September 2022.