Storm Damage and Risk Preferences: Panel Evidence from Germany

Kahsay, Goytom Abraha; Osberghaus, Daniel

doi:10.1007/s10640-017-0152-5

Cited by 27 publications

(22 citation statements)

References 33 publications

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“…Additionally, seeFeng et al (2010),Dillon et al (2011), Gröger andZylberberg (2016),Riosmena et al (2018),Jessoe et al (2018), and Quiñones (2019).4 For example, empirical studies that investigate the impact of natural disasters find evidence for increasing risk aversion(Cameron & Shah, 2015;Chantarat et al, 2015;Cassar et al, 2017;Liebenehm et al, 2018), decreasing risk aversionHanaoka et al, 2018;Kahsay & Osberghaus, 2018), or an inconsistent effect(Eckel et al, 2009;Willinger et al, 2013).…”

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confidence: 99%

Left home high and dry-reduced migration in response to repeated droughts in Thailand and Vietnam

2021

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We investigate the extent to which droughts impact migration responses of rural households in Thailand and Vietnam, as well as the role of underlying mechanisms such as risk aversion and socioeconomic status that may affect the response. We combine longitudinal household data from the Thailand Vietnam Socio Economic Panel from 2007 to 2017 with monthly high-resolution (0.5°) rainfall and temperature data from the Global Historical Climatology Network Version 2 and the Climate Anomaly Monitoring System (respectively) to characterize droughts at the sub-district level. We find that exposure to two consecutive years of moderate drought decreases household participation in migration by 5.3 percentage points (11.1% of the mean). Analysis of underlying mechanisms highlights the role of socioeconomic status in shaping these reductions in migration. While drought exposure substantially erodes socioeconomic status and increases risk aversion, it is deteriorations in consumption and assets per capita that appear to shape the negative effect of droughts on migration. This pattern is consistent with the presence of an environmentally induced poverty trap, whereby exposure to climate shocks directly and indirectly reduces rural population mobility, particularly among poorer households.

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confidence: 99%

Left home high and dry-reduced migration in response to repeated droughts in Thailand and Vietnam

2021

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“…The question regarding the direction of the preference shift remains unsettled in this literature, with some of the evidence suggesting that preferences altered in the opposite direction after the event. Studies like Page et al (2014) and Kahsay and Osberghaus (2018) found a downward shift in risk aversion among survivors of flood and storms, while Abatoyo and Lynham (2020), Eckel et al (2009), and Hanaoka et al (2018) showed that the risk-seeking response after natural disaster is significant only for a particular gender. Voors et al (2012) found increased impulsivity and altruistic behavior in the aftermath of a civil war, but Callen (2015) found an increase in the monthly discount factor among tsunami survivors in Sri Lanka.…”

Section: Previous Researchmentioning

confidence: 99%

Traumatic Experience and Self-Control in Old Age

Choung

Pak

2022

Preprint

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The behavioral economics literature suggests that exposure to traumatic events shifts preference features like risk aversion and time preference. Drawing on this literature, this study explored the relationship between early life exposure to traumatic events and self-control at older ages. The data were obtained from the Health and Retirement Study, which offers retrospective data on trauma exposure and a measure of self-control. The results showed that the experience of serious physical attacks or assaults was associated with a 3.1% reduction in self-control, above and beyond the influence of demographic characteristics and childhood socioeconomic disadvantages. The mean number of years elapsed since the physical attack was about 30, conditional on exposure, indicating that traumatic experiences early in life exert a lasting influence on self-control. Our findings were consistent with evidence that experiences of natural disasters and armed conflicts increased impatience among survivors.JEL classification codeD12, D14, D91

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“…Based on classical economic theories, preferences (including risk preferences) are stable and unaffected by experience over time (Stigler and Becker, 1977 ). However, evidence from empirical studies shows that people's risk attitudes can be affected by negative shocks (Bogliacino et al, 2021 ), such as natural disasters (Eckel et al, 2009 ; Page et al, 2014 ; Hanaoka et al, 2018 ; Kahsay and Osberghaus, 2018 ; Abatayo and Lynham, 2020 ), financial crisis (Jetter et al, 2020 ), and violent events (Callen et al, 2014 ; Jakiela and Ozier, 2019 ). COVID-19 has affected the global economy substantially.…”

Section: Introductionmentioning

confidence: 99%

Stability of Risk Preferences During COVID-19: Evidence From Four Measurements

Zhang

Palma

2022

Front. Psychol.

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This article studies the stability of risk-preference during the COVID-19 pandemic. The results differ between risk-preference measurements and also men and women. We use March 13, 2020, when President Trump declared a national state of emergency as a time anchor to define the pre-pandemic and on-pandemic periods. The pre-pandemic experiment was conducted on February 21, 2020. There are three on-pandemic rounds conducted 10 days, 15 days, and 20 days after the COVID-19 emergency declaration. We include four different risk-preference measures. Men are more sensitive to the pandemic and become more risk-averse based on the Balloon Analogue Risk Task (BART). Women become more risk-averse in the Social and Experience Seeking domains based on the results from the Domain-Specific Risk-Taking (DOSPERT) and Sensation Seeking Scales (SSS). Both men's and women's risk-preference are stable during COVID-19 based on a Gamble Choice (GC) task. The results match our hypotheses which are based on the discussion about whether the psychological construct of risk-preference is general or domain-specific. The differential outcomes between incentivized behavioral and self-reported propensity measures of risk-preference in our experiment show the caveats for studies using a single measure to test risk-preference changes during COVID-19.

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Storm Damage and Risk Preferences: Panel Evidence from Germany

Cited by 27 publications

References 33 publications

Left home high and dry-reduced migration in response to repeated droughts in Thailand and Vietnam

Left home high and dry-reduced migration in response to repeated droughts in Thailand and Vietnam

Traumatic Experience and Self-Control in Old Age

Stability of Risk Preferences During COVID-19: Evidence From Four Measurements

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