The influence of the pandemic on financial decisions made by individuals in Turkey: A cross-sectional study

Abstract

The citizens of Turkey were confronted with the shock of the Covid-19 pandemic while struggling with high inflation and unemployment rates, and a weakening domestic currency. However, a noteworthy phenomenon during the year 2020 was the performance of stock market in Turkey, which was mostly driven by local individuals. Not only stocks, but cryptocurrencies are also popular investments favored by the populace, collectively signaling an increase in risk-taking behavior. Learning more about this point of interest is even more intriguing when considering the ongoing poor economic circumstances. In this study, the financial product decisions of individuals living in Turkey are examined for the first year of pandemic. The data were collected using an Internet survey. Information on participant’s demographics, financial product choices, declarations on changes in their interest in financial markets/ products, financial status, and net income after Covid19 was used. The results show that changes were associated with several product preferences, particularly with cryptocurrency. The findings indicate that regulators/authorities need to understand the reasons and conditions which influence those financial decisions and intervene if necessary because such excessive risk taking may eventually deteriorate social and financial wealth across the whole country.