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Risk perceptions and politics: Evidence from the COVID-19 pandemic

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  • Barrios, John M.
  • Hochberg, Yael V.

Abstract

Politics may color interpretations of facts, and thus perceptions of risk. We find that a higher share of Trump voters in a county is associated with lower perceptions of risk during the COVID-19 pandemic. Controlling for COVID-19 case counts and deaths, as Trump's vote share rises in the local area, individuals search less for information on the virus and its potential economic impacts, and engage in fewer visits to non-essential businesses. Our results suggest that politics and the media may play an important role in determining the formation of risk perceptions, and may therefore affect both economic and health-related reactions to unanticipated health crises.

Suggested Citation

  • Barrios, John M. & Hochberg, Yael V., 2021. "Risk perceptions and politics: Evidence from the COVID-19 pandemic," Journal of Financial Economics, Elsevier, vol. 142(2), pages 862-879.
    • Handle: RePEc:eee:jfinec:v:142:y:2021:i:2:p:862-879
    DOI: 10.1016/j.jfineco.2021.05.039
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    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • I1 - Health, Education, and Welfare - - Health
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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