Effects of Natural Shocks on Risk Behavior. Experimental Evidence from Cameroon

Roland Azibo Balgah and Gertrud Buchenrieder, neé Schrieder

No 114215, 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland from European Association of Agricultural Economists

Abstract: Increasing occurrence of devastating natural shocks has stimulated research interest in the economics of natural disasters. Much of this scholarly work concentrates on effects of shocks on poverty, risk and vulnerability, and very little on understanding the effects of natural shocks on risk behavior. Referring to a 25 year-old disaster, we use unique survey data and experiment results from two disaster affected communities in rural Cameroon to test two hypotheses: (1) Natural shocks affect long term risk behavior; and (2) self-relocation into risk-prone areas is an explicit demonstration of risk taking. The results reveal differentiated risk behavior in self-relocated and state-resettled households, with the former taking higher risks compared to resettled households. Experiments strongly support trends observed in the empirical study, but captured cognitive behavior better than the survey. Results support previous evidence on applying experiments in understanding cognitive risk behavior and confirm our hypotheses.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 12
Date: 2011
New Economics Papers: this item is included in nep-afr, nep-dev and nep-exp
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae11:114215

DOI: 10.22004/ag.econ.114215

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