The Economic Impact of the COVID-19 Pandemic on Individual Decision-Making: Uncertainty, Mood, and Behavioral Shifts

The COVID-19 pandemic has significantly altered the global economic landscape, impacting not only macroeconomic systems but also the financial behaviors and psychological states of individuals. This paper investigates the economic consequences of the pandemic at the individual level, focusing on decision-making under uncertainty and the role of low mood in shaping financial choices. Integrating perspectives from behavioral economics and cognitive psychology, we examine how heightened uncertainty, perceived loss of control, and affective disturbances, such as anxiety and depression, have influenced economic behaviors including risk tolerance, time discounting, and consumption postponement. The findings suggest that economic decision-making during crises is deeply intertwined with psychological conditions, revealing how emotional priming, stress-related cognitive distortions, and uncertainty-induced pessimism can lead to suboptimal financial choices. These insights underscore the need for interdisciplinary approaches in designing policy measures that address not only material welfare but also psychological resilience in times of economic turmoil.