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Risk Perceptions, Optimism, and Natural Hazards

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  • V. Kerry Smith

Abstract

This article uses the panel survey developed for the Health and Retirement Study to evaluate whether Hurricane Andrew in 1992 altered longevity expectations of respondents who lived in Dade County, Florida, the location experiencing the majority of about 20 billion dollars of damage. Longevity expectations have been used as a proxy measure for both individual subjective risk assessments and dispositional optimism. The panel structure allows comparison of those respondents' longevity assessments when the timing of their survey responses bracket Andrew with those of individuals where it does not. After controlling for health effects, the results indicate a significant reduction in longevity expectations due to the information respondents appear to have associated with the storm.

Suggested Citation

  • V. Kerry Smith, 2008. "Risk Perceptions, Optimism, and Natural Hazards," Risk Analysis, John Wiley & Sons, vol. 28(6), pages 1763-1767, December.
    • Handle: RePEc:wly:riskan:v:28:y:2008:i:6:p:1763-1767
    DOI: 10.1111/j.1539-6924.2008.00880.x
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    References listed on IDEAS

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    1. V. Kerry Smith & Donald H. Taylor & Frank A. Sloan, 2001. "Longevity Expectations and Death: Can People Predict Their Own Demise?," American Economic Review, American Economic Association, vol. 91(4), pages 1126-1134, September.
    2. Kurt J. Beron & James C. Murdoch & Mark A. Thayer & Wim P. M. Vijverberg, 1997. "An Analysis of the Housing Market before and after the 1989 Loma Prieta Earthquake," Land Economics, University of Wisconsin Press, vol. 73(1), pages 101-113.
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    9. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 537-579.
    10. James C. Murdoch & Harinder Singh & Mark Thayer, 1993. "The Impact of Natural Hazards on Housing Values: The Loma Prieta Earthquake," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 21(2), pages 167-184, June.
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    Cited by:

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    2. Bourdeau-Brien, Michael & Kryzanowski, Lawrence, 2020. "Natural disasters and risk aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 818-835.
    3. Michael F. Pesko, 2018. "The Impact Of Perceived Background Risk On Behavioral Health: Evidence From Hurricane Katrina," Economic Inquiry, Western Economic Association International, vol. 56(4), pages 2099-2115, October.
    4. Hanna Freudenreich & Sindu W. Kebede, 2022. "Experience of shocks, household wealth and expectation formation: Evidence from smallholder farmers in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 53(5), pages 756-774, September.
    5. Georgic, Will & Klaiber, H. Allen, 2022. "Stocks, flows, and flood insurance: A nationwide analysis of the capitalized impact of annual premium discounts on housing values," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).

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