Date of this Version
This paper is supported by the National Institutes of Health (NIH) via the Population Studies Center (NICHD P2C HD044964) and the Population Aging Research Center (NIA P30 AG012836) at the University of Pennsylvania.
Many economic decisions are influenced by individual risk preferences, and new evidence challenges the immutability of these preferences. This paper explores the impact of disasters on individual risk attitudes using longitudinal data from Indonesia, focusing on the heterogeneity of disasters by type, severity and timing. I find risk aversion increases for a decade following disasters, and high-mortality disasters, namely earthquakes, are more salient to individuals than higher frequency, lower-mortality disasters. These outcomes shed light on how survivors in a developing country respond to and internalize disaster shocks and are informative to policymakers in addressing the increasing threat of disasters.
risk preference, natural disasters, Indonesia
Purcell, Helene 2021. "The Heterogeneous Impacts of Natural Disasters on Risk Preferences in Indonesia." University of Pennsylvania Population Center Working Paper (PSC/PARC), 2021-78. https://repository.upenn.edu/psc_publications/78.
Date Posted: 16 December 2021