NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Risk-Taking Behavior in the Wake of Natural Disasters

Lisa Cameron, Manisha Shah

NBER Working Paper No. 19534
Issued in October 2013
NBER Program(s):   DEV   EEE

We investigate whether experiencing a natural disaster affects risk-taking behavior. We conduct standard risk games (using real money) with randomly selected individuals in rural Indonesia. We find that individuals who recently suffered a flood or earthquake exhibit more risk aversion. Experiencing a natural disaster causes people to perceive that they now face a greater risk of a future disaster. We conclude that this change in perception of background risk causes people to take fewer risks. We provide evidence that experimental risk behavior is correlated with real life risk behavior, highlighting the importance of our results.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Users who downloaded this paper also downloaded these:
Cavallo, Cavallo, and Rigobon w19474 Prices and Supply Disruptions during Natural Disasters
Kellenberg and Levinson w19533 Waste of Effort? International Environmental Agreements
Pallais w19480 Small Differences that Matter: Mistakes in Applying to College
Currie, Graff Zivin, Mullins, and Neidell w19571 What Do We Know About Short and Long Term Effects of Early Life Exposure to Pollution?
Coffman, Coffman, and Ericson w19508 The Size of the LGBT Population and the Magnitude of Anti-Gay Sentiment are Substantially Underestimated
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us