Evolution of Risk Aversion over Five Years after a Major Natural Disaster

Nicholas Ingwersen, Elizabeth Frankenberg and Duncan Thomas

No 31102, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The impact of exposure to a major unanticipated natural disaster on the evolution of survivors’ attitudes toward risk is examined, exploiting plausibly exogenous variation in exposure to the 2004 Indian Ocean tsunami in combination with rich population-representative longitudinal survey data spanning the five years after the tsunami. Respondents chose among pairs of hypothetical income streams. Those directly exposed to the tsunami made choices consistent with greater willingness to take on risk relative to those not directly exposed to the tsunami. These differences are short-lived: starting a year later, there is no evidence of differences in willingness to take on risk between the two groups. These conclusions hold for tsunami-related exposures measured at the individual and community level. Apparently, tsunami survivors were inclined to assume greater financial risk in the short-term while rebuilding their lives after the disaster.

JEL-codes: D12 D81 O12 Q54 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-env and nep-upt
Note: DEV
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Nicholas Ingwersen & Elizabeth Frankenberg & Duncan Thomas, 2023. "Evolution of risk aversion over five years after a major natural disaster," Journal of Development Economics, .

Downloads: (external link)
http://www.nber.org/papers/w31102.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:31102

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w31102

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().