Temporal Stability of Risk Attitudes and the Impact of Adverse Shocks—A Panel Data Analysis from Thailand and Vietnam

Liebenehm, Sabine

doi:10.1016/j.worlddev.2017.07.020

Cited by 18 publications

(9 citation statements)

References 35 publications

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“…Thus, Liebenehm (2017) attributes the lack of impact on risk attitudes stemming from idiosyncratic shocks (as compared to significant impacts stemming from covariate shocks) to the fact that individuals can insure idiosyncratic risks through social networks. Kosec and Mo (2017) find supporting evidence of this mechanism, studying Pakistan’s devastating 2010 floods: social protection mitigates the negative impacts of natural disasters on aspirations, which can potentially be related to risk perceptions.…”

Section: Introductionmentioning

confidence: 99%

Natural disasters, social protection, and risk perceptions

et al. 2018

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Natural disasters give rise to loss and damage and may affect subjective expectations about the prevalence and severity of future disasters. These expectations might then in turn shape individuals’ investment behaviors, potentially affecting their incomes in subsequent years. As part of an emerging literature on endogenous preferences, economists have begun studying the consequences that exposure to natural disasters have on risk attitudes, perceptions, and behavior. We add to this field by studying the impact of being struck by the December 2012 Cyclone Evan on Fijian households’ risk attitudes and subjective expectations about the likelihood and severity of natural disasters over the next 20 years. The randomness of the cyclone’s path allows us to estimate the causal effects of exposure on both risk attitudes and risk perceptions. Our results show that being struck by an extreme event substantially changes individuals’ risk perceptions as well as their beliefs about the frequency and magnitude of future shocks. However, we find sharply distinct results for the two ethnicities in our sample, indigenous Fijians and Indo-Fijians; the impact of the natural disaster aligns with previous results in the literature on risk attitudes and risk perceptions for Indo-Fijians, whereas they have little to no impact on those same measures for indigenous Fijians. To provide welfare implications for our results, we compare households’ risk perceptions to climate and hydrological models of future disaster risk, and find that both ethnic groups over-infer the risk of future disasters relative to the model predictions. If such distorted beliefs encourage over-investment in preventative measures at the cost of other productive investments, these biases could have negative welfare impacts. Understanding belief biases and how they vary across social contexts may thus help decision makers design policy instruments to reduce such inefficiencies, particularly in the face of climate change.

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Section: Introductionmentioning

confidence: 99%

Natural disasters, social protection, and risk perceptions

et al. 2018

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“…Decker et al [20] provide an overview of articles studying important events, which were found to influence RA. Additionally, Liebenehm et al [44] and Sachs et al [45] report changes in RAs over time and therefore advocate the time-variability of RAs. However, for the purpose of our study, which was to identify aspects of healthcare utilization associated with RAs in cross-section, the results should not be biased by the assumption.…”

Section: Discussionmentioning

confidence: 99%

Are health risk attitude and general risk attitude associated with healthcare utilization, costs and working ability? Results from the German KORA FF4 cohort study

et al. 2019

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BackgroundRisk attitudes influence decisions made under uncertainty. This paper investigates the association of risk attitudes with the utilization of preventive and general healthcare services, work absence and resulting costs to explore their contribution to the heterogeneity in utilization.MethodsData of 1823 individuals (56.5 ± 9.5 years), participating in the German KORA FF4 population-based cohort study (2013/2014) were analyzed. Individuals’ general and health risk attitude were measured as willingness to take risk (WTTR) on 11-point scales. Utilization of preventive and medical services and work absence was assessed and annual costs were calculated from a societal perspective. Generalized linear models with log-link function (logistic, negative-binomial and gamma regression) adjusted for age, sex, and height were used to analyze the association of WTTR with the utilizations and costs.ResultsHigher WTTR was significantly associated with lower healthcare utilization (physician visits, physical therapy, and medication intake), work absence days and indirect costs. Regarding preventive services, an overall negative correlation between WTTR and utilization was examined but this observation remained non-significant except for the outcome medical check-up. Here, higher WTTR was significantly associated with a lower probability of participation. For all associations mentioned, Odds Ratios ranged between 0.90 and 0.79, with p < 0.05. Comparing the two risk attitudes (general and regarding health) we obtained similar results regarding the directions of associations.ConclusionsWe conclude that variations in risk attitudes contribute to the heterogeneity of healthcare utilization. Thus, knowledge of their associations with utilization might help to better understand individual decision-making – especially in case of participation in preventive services.Electronic supplementary materialThe online version of this article (10.1186/s13561-019-0243-9) contains supplementary material, which is available to authorized users.

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“…In addition to the war-related stressors of their adolescence and early adulthood, and the stressors of economic volatility following in the wake of late twentieth century market reforms, older Vietnamese experience myriad life event stressors that are associated with the life course of aging, such as widowhood, the death of family members, and caregiving for severely ill kin, which also demonstrate an association with CVD (e.g., Capistrant et al 2012). Furthermore, and more so than is common in many western populations, wide swathes of older adults in LMICs also endure acute and chronic stressors linked to negative income shocks and persistent deficits in their material conditions (Liebenehm 2018). In assessing associations among war-related stressors, PTSD and CVD it is also important to account for commonplace stressors in the daily lives of Vietnamese older adults which may also exacerbate CVD risk.…”

Section: Gender Stress Exposure and Cvdmentioning

confidence: 99%