COVID-19 OUTBREAK AND RISK TOLERANCE OF FINANCIAL DECISION MAKERS

The impact of the COVID-19 could be seen in two ways: at one side it affected the close proximity by practicing social distancing which further led to the shutdown of institutions, offices, shopping malls etc. whereas, on other hand economic factors such as consumers, investors etc. unable to predict that how long the effect of virus spread will last. To analyze these issues, the current study examines the effect of the COVID19 outbreak on financial risk behavior in a large sample size of 18913 of Financial Decision Makers (FDM) from Pakistan during 1 st April 2019 to 31st July 2020. In the study time span, no COVID-19 cases were known to a point where cases of COVID-19 were in the millions. The study time period gives real time insight in which to compare pre- and post-pandemic financial risk tolerance. The outcomes indicated that the probability of FDM can be changed when an extraordinary financial, societal, or ecological stun happens. An overall move from financial risk was experienced after the declaration of COVID-19 outbreak. The outcomes indicated a downward risk preference of the FDM during COVID-19 pandemic.