Do Risk Preferences Change? Evidence from Panel Data before and after the Great East Japan Earthquake

Chie Hanaoka, Hitoshi Shigeoka and Yasutora Watanabe

No 21400, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate whether individuals’ risk preferences change after experiencing a natural disaster, specifically, the 2011 Great East Japan Earthquake. Exploiting the panels of nationally representative surveys on risk preferences, we find that men who experienced greater intensity of the Earthquake became more risk tolerant after the Earthquake. Furthermore, these men gamble more, which is consistent with the direction of changes in risk preferences. We find no such pattern for women. Finally, the effects on men’s risk preferences are persistent even five years after the Earthquake at almost the same magnitude as those shortly after the Earthquake.

JEL-codes: C23 D81 J16 Q54 (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-lab and nep-upt
Note: AG EEE EH
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Citations: View citations in EconPapers (58)

Published as Hanaoka, Chie, Hitoshi Shigeoka, and Yasutora Watanabe. 2018. "Do Risk Preferences Change? Evidence from the Great East Japan Earthquake." American Economic Journal: Applied Economics, 10 (2): 298-330. DOI: 10.1257/app.20170048

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