While unintentional man-made disasters constitute the majority of man-made catastrophes, empirical evidence on their economic consequences remains scarce. Utilizing a unique dataset on extremely severe accidents (ESAs) in China and a nationally representative longitudinal household survey, we find that unintentional man-made disasters reduce individuals' willingness to take risks. We further demonstrate that the severity of official penalties following ESAs is positively correlated with both fatalities and economic losses, yet these punitive measures fail to mitigate the negative impact on risk preferences. Additionally, we find that ESAs reduce demand for riskier, high-return-oriented insurance products, though they do not diminish demand for protection-oriented, non-investment productslike health insurance. Our findings address a critical gap in the literature regarding the effects of unintentional manmade disasters on risk attitudes and insurance demand.

The aging population is intensifying, and solving the problem of elderly care is urgent. This article is based on CHFS (2019) survey data, and empirical research has found that commercial pension insurance significantly promotes households' allocation of risky financial assets. The mechanism is tested using household risk perception and investment risk preference as mediating variables. In addition, through heterogeneity testing, it was found that the positive effect of commercial pension insurance on the allocation of risky financial assets is more significant in rural households with household registration, two sets of housing, and households in the northeast.

The aging population is expanding globally, and addressing the challenges of elderly care is urgent. Using the 2019 China Household Finance Survey data, this study finds that commercial pension insurance significantly promotes households’ allocation of risky financial assets. We test the mechanisms using household risk perception and investment risk preference as mediating variables. Heterogeneity analysis reveals that the positive effect of commercial pension insurance on risky financial asset allocation is more significant in rural households with household registration, those with two sets of housing, and households in the northeast. The research findings of this article aim to promote the continuous improvement of China’s elderly care system and provide important empirical evidence for the formulation of relevant policies.

This paper addresses the dynamic tail risk in price-limited financial markets. We propose a novel censored autoregressive conditional Fr´echet model with a fiexible evolution scheme for the time-varying parameters, which allows deciphering the impact of historical information on tail risk from the viewpoint of different risk preferences. The proposed model can well accommodate many important empirical characteristics, such as thick-tailness, extreme risk clustering, and price limits. The empirical analysis of the Chinese stock market reveals the effectiveness of our model in interpreting and predicting time-varying tail behaviors in price-limited equity markets, providing a new tool for financial risk management.

Macro-prudential policy plays a crucial role in stabilizing the financial system and influencing banks' risk preferences and willingness to take risks. This study examines the influence of macro-prudential policies on bank risk-taking using unbalanced panel data from 126 commercial banks in China between 2010 and 2021. The difference-in-differences model is employed to analyze the data. The empirical findings demonstrate that implementing macro-prudential policies in China effectively enhances bank risk prevention measures. In other words, macro-prudential policy implementation facilitates the digital transformation of banks and subsequently reduces risk-taking behaviors. Moreover, the heterogeneity test reveals that macro-prudential policies have a more significant impact on the risk-taking behavior of commercial banks with higher capital adequacy ratios compared to those with lower ratios. Additionally, commercial banks with strong interbank dependence exhibit more pronounced effects on their risk profiles when subjected to macroprudential policies with stricter capital supervision requirements. Therefore, this study proposes policy recommendations for strengthening bank capital supervision through differentiated approaches, serving as a valuable reference for the regulatory authorities.

Does the ancient farming culture shape the risk-taking behavior of households today? Using a dataset covering over 130,000 households from a Chinese national survey, our study examines the relationship between the culture of rice cultivation and the financial behavior of modern households. We find that households in regions with a higher rate of historical rice cultivation are more likely to invest in the financial market and buy lottery, but less likely to purchase insurance. We also find that the rice area has more households with risk preferences consistent with prospect theory expectations. To account for omitted variable bias, we use average regional rainfall and downstream distance to ancient irrigation systems as instrumental variables for rice cultivation, and our results remain robust. We find that the rice effect cannot be explained by regional economic development, traditional Confucian values, or ethnic diversity. To explore potential mechanisms, we find that households in rice regions are more likely to borrow money from friends and relatives and have interest waived, and historical commercial development has also been influenced by the rice culture.

Utilizing a national online survey we conducted in China, we examine the impact of COVID-19 on individuals’ willingness to take risks, willingness to trust other people, and mental health measured by the Center for Epidemiological Studies-Depression (CES-D) scale. Our findings suggest that people who live in the neighborhood with a higher number of confirmed cases became more risk-averse, less likely to trust others, and more depressed. Interestingly, the effects on risk preferences and trust attitudes are statistically significant only for men, and the effects on depression are statistically significant only for women. Furthermore, the impact of COVID-19 on financial decisions, such as buying new commercial insurance and making a risky investment, is also statistically significant only for men, which is consistent with our findings on risk preferences. Attitudes towards cadres and doctors mainly drive the results on trust attitudes. The change in employment status does not drive these effects.

This paper extends Lerner and Schoar’s (2004) argument on illiquidity puzzle of private equity funds. We examine the roles that investment illiquidity, along with bounded rationality and rent-seeking behavior, plays in private-equity buyouts. Collectively, investors employ club deals to screen out fund managers who might misuse discretionary rights to engage buyout deals. A club deal is launched by a group of private equity firms that pool their assets together, make a joint bid for a buyout target, and monitor the buyout processes collectively. Thus, this paper aims at clarifying whether or not such discretionary rights improve the choice of buyout target by, as well as the performance of private equity funds. We found that the performance of buyout funds persisted and affected the choice of the club deal as the major monitoring mechanism. This paper contributes to our understandings of investment behavior in private equity buyouts as follows. First, the performance of buyout funds has improved for at least two time periods between 1999 and mid-2007. The phenomenon that fund performance affects the choice of club deals is consistent across a variety of private equity funds, such as buyout, venture, growth, and mezzanine funds. Moreover, risk preference does not affect choice of club deals directly; instead, it has a moderating effect on choice of club deals through its interaction with the location of reference point for risk aversion. Finally, both fund size and fund sequence have U-shaped relations to the choice of club deals, while deal value of buyouts is related positively to the choice of club deals.