Dash and dine, for tomorrow we dice

This study examines the impact of the COVID-19 pandemic on individual attitude towards risk by analysing data sourced from the Italian Survey on Household Income and Wealth, conducted by the Bank of Italy. We compare individuals’ self-reported risk attitude in the period that precedes and during the pandemic. Our findings reveal an overall increase in declared risk proneness at the population level. To analyse this shift at the individual level, we develop an extension of the ordered probit model, addressing an implicit censoring issue stemming from the limited response categories in the survey question. By applying this model to a series of survey waves, we differentiate between natural trends in self-reported risk attitude within the Italian population and changes directly attributable to the pandemic. A more nuanced picture emerges from the individual-level analysis: socio-economic and behavioural factors that expose individuals’ vulnerability to the pandemic are associated with increased risk aversion. Conversely, factors that potentially alleviate these challenging circumstances are often associated with greater risk tolerance. Our study highlights the evolving pattern of attitude towards risk providing valuable insights into how individuals manage risk during extraordinary circumstances.