Household investment mistakes are an important concern for researchers and policymakers alike. Portfolio underdiversification ranks among those mistakes that are potentially most costly. However, its ...roots and empirical importance are poorly understood. I estimate quantitatively meaningful diversification statistics and investigate their relationship with key variables. Nearly all households that score high on financial literacy or rely on professionals or private contacts for advice achieve reasonable investment outcomes. Compared to these groups, households with below-median financial literacy that trust their own decision-making capabilities lose an expected 50 bps on average. All group differences stem from the top of the loss distribution.
Examine the effects of the COVID-19 pandemic on the mental health and loneliness in the general population. More specifically, the study focused on prevalence of anxiety and depression symptoms, the ...extent to which individuals with existing symptoms recovered or not, the prevalence of subtypes of loneliness, and the extent to which loneliness before and during this pandemic was associated with anxiety and depression symptoms.
Data was extracted from the longitudinal LISS panel, based on a probability sample of the Dutch population, with assessments on loneliness in October 2019 (T1) and June 2020 (T4), and anxiety and depression symptoms in November 2019 (T2), March 2020 (T3) and June 2020 (T4; Ntotal = 4,084). Loneliness was examined with the De Jong Gierveld Loneliness Scale and anxiety and depression symptoms with the Mental Health Inventory (MHI-5).
Repeated measures multivariate logistic regression analyses (RMMLRA) showed a statistical significant lower prevalence of anxiety and depression symptoms after the outbreak (T4 = 15.3%) than before (T2 = 16.8%) and during the COVID-19 outbreak (T3 = 17.2%). According to the Reliable Change Index, the distribution of recovery categories (remission, improvement, unchanged and worsening symptoms) after the outbreak did not differ significantly from the distribution of these categories before the outbreak. RMMLRA revealed that the prevalence of emotional loneliness increased significantly after the outbreak (T1 = 18.4%, T4 = 24.8%). Among individuals who were not lonely before and after the outbreak the prevalence of symptoms decreased significantly (T2 = 7.0%, T4 = 4.4%) and, likewise, among those who were not lonely anymore after the outbreak (T2 = 21.5%, T4 = 14.5%). However, the prevalence of symptoms increased significantly among those who became lonely during the pandemic (T2 = 17.9%, T4 = 26.3%).
Findings suggest that this pandemic did not negatively affect the prevalence of anxiety and depression symptoms nor the normal recovery of symptoms among the general population during the first four months, but that emotional loneliness increased.
In order to slow the spread of the CoViD-19 pandemic, governments around the world have enacted a wide set of policies limiting the transmission of the disease. Initially, these focused on ...non-pharmaceutical interventions; more recently, vaccinations and large-scale rapid testing have started to play a major role. The objective of this study is to explain the quantitative effects of these policies on determining the course of the pandemic, allowing for factors like seasonality or virus strains with different transmission profiles. To do so, the study develops an agent-based simulation model, which explicitly takes into account test demand and behavioral changes following positive tests. The model is estimated using data for the second and the third wave of the CoViD-19 pandemic in Germany. The paper finds that during a period where vaccination rates rose from 5 to 40%, seasonality and rapid testing had the largest effect on reducing infection numbers. Frequent large-scale rapid testing should remain part of strategies to contain CoViD-19; it can substitute for many non-pharmaceutical interventions that come at a much larger cost to individuals, society, and the economy.
We analyze risk preferences using an experiment with real incentives in a representative sample of 1,422 Dutch respondents. Our econometric model incorporates four structural parameters that vary ...with observed and unobserved characteristics: utility curvature, loss aversion, preferences toward the timing of uncertainty resolution, and the propensity to choose randomly rather than on the basis of preferences. We find that all four parameters contribute to explaining choice behavior. The structural parameters are significantly associated with socioeconomic variables, but it is essential to incorporate unobserved heterogeneity in each of them to match the rich variety of choice patterns in the data.
We study the co‐evolution of mental health with the most prominent risk factors associated with the COVID‐19 pandemic for the Dutch working population. We exploit data from the Longitudinal Internet ...Studies for the Social Sciences panel from before the pandemic and five questionnaires in its first year. We find mental health decreased sharply with the onset of the first lockdown but recovered quickly, reaching levels comparable to those a year earlier. Labor market uncertainty, perceived infection risk, and loneliness are all associated with worsening mental health. Moreover, parents of children younger than 12 experience a significant drop in mental health.
•Dynamics of working hours and household income across different stages of the Covid-19 pandemic.•Socio-economic status is strongly related to changes in working hours, especially with strict ...economic restrictions.•Household income is unaffected for all socio-economic groups.•Ability to work from home and essential worker status explain the socioeconomic gradient in total working hours.•Provide suggestive evidence that large-scale labor hoarding schemes have helped insure employees.
Using customized panel data spanning the entire year of 2020, we analyze the dynamics of working hours and household income across different stages of the Covid-19 pandemic. Like many other countries, during this period, the Netherlands experienced a quick spread of the SARS-CoV-2 virus, adopted a set of fairly strict social distancing measures, gradually reopened, and imposed another lockdown to contain the second wave. We show that socioeconomic status is strongly related to changes in working hours, especially when strict economic restrictions are in place. In contrast, household income is equally unaffected for all socioeconomic groups. Examining the drivers of these observations, we find that pandemic-specific job characteristics (the ability to work from home and essential worker status) help explain the socioeconomic gradient in total working hours. Household income is largely decoupled from shocks to working hours for employees. We provide suggestive evidence that large-scale labor hoarding schemes have helped insure employees against shocks to their employers.
We study the effect of permanent income innovations on health for a prime-aged population. Using information on more than half a million individuals sampled over a 25-year period in three different ...cross-sectional surveys we aggregate data by date-of-birth cohort to construct a "synthetic cohort" data set with details of income, expenditure, socio-demographic factors, health outcomes, and selected risk factors. We then exploit structural and arguably exogenous changes in cohort incomes over the 1980s and 1990s to uncover causal effects of permanent income shocks on health. We find that such income innovations have little effect on a wide range of health measures, but do lead to increases in mortality and risky health behaviour.
Subjective expectations are important primitives in many economic models, yet their direct measurement often yields imprecise and inconsistent data. This has previously been treated as a pure ...measurement error problem. In contrast, this paper argues that the individual-level precision of such data may reflect the structure of the underlying decision process. We estimate a semiparametric double index model on data specifically collected for this purpose and show that stock market participation decisions exhibit little variation in economic model primitives when individuals provide error-ridden belief statements. In contrast, beliefs and risk preferences predict strong variation in stock market participation for individuals who report precise expectations measures.
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