Trouble on my mind: the effect of catastrophic events on people’s worries

Andree Ehlert, Jan Seidel () and Ursula Weisenfeld
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Andree Ehlert: Leuphana University of Lüneburg
Jan Seidel: Leuphana University of Lüneburg
Ursula Weisenfeld: Leuphana University of Lüneburg

Empirical Economics, 2020, vol. 59, issue 2, No 16, 975 pages

Abstract: Abstract Major economic, environmental, or social shocks induce uncertainty, which in turn may impact economic development and may require institutional change. Based on the idea that catastrophic events (CEs) affect people’s perceptions of reality and judgments about the future, this paper analyzes the effect of CEs on people’s worries in terms of social, economic, and environmental issues. In particular, we consider the terrorist attack 9/11 in 2001, the beginning of the financial crisis in 2008, and the nuclear disaster in Fukushima in 2011. We propose two possible mechanisms: A CE in one sphere may affect people’s worries in general (“spillover”) or it may lead to people focusing on that sphere and being less worried about other spheres (“crowding out”). We argue that the determinants of the mechanisms are related to the type of CE, that a person’s professional background moderates the influence of a CE on his or her worries, and that the subsequent development of worries is affected by whether institutional responses are contested. The analysis is based on longitudinal data of the German Socio-Economic Panel.

Keywords: Catastrophic event; Institutional change; Social; Economic; Environmental; Worries; Professional background; GSOEP; Spillover; Crowding out; Panel data (search for similar items in EconPapers)
JEL-codes: A13 C33 I18 I31 Q51 Z13 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s00181-019-01682-9

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