Effects of Natural Shocks on Risk Behavior. Experimental Evidence from Cameroon
AbstractIncreasing occurrence of devastating natural shocks has stimulated research interest in the economics of natural disasters. Much of this scholarly work concentrates on effects of shocks on poverty, risk and vulnerability, and very little on understanding the effects of natural shocks on risk behavior. Referring to a 25 year-old disaster, we use unique survey data and experiment results from two disaster affected communities in rural Cameroon to test two hypotheses: (1) Natural shocks affect long term risk behavior; and (2) self-relocation into risk-prone areas is an explicit demonstration of risk taking. The results reveal differentiated risk behavior in self-relocated and state-resettled households, with the former taking higher risks compared to resettled households. Experiments strongly support trends observed in the empirical study, but captured cognitive behavior better than the survey. Results support previous evidence on applying experiments in understanding cognitive risk behavior and confirm our hypotheses.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114215.
Date of creation: 2011
Date of revision:
Shocks; risk behavior; experiment; Cameroon; Risk and Uncertainty;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-15 (All new papers)
- NEP-DEV-2011-10-15 (Development)
- NEP-EXP-2011-10-15 (Experimental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alma Cohen & Liran Einav, 2007.
"Estimating Risk Preferences from Deductible Choice,"
American Economic Review,
American Economic Association, vol. 97(3), pages 745-788, June.
- Alma Cohen & Liran Einav, 2005. "Estimating Risk Preferences from Deductible Choice," Discussion Papers 04-031, Stanford Institute for Economic Policy Research.
- Alma Cohen & Liran Einav, 2005. "Estimating Risk Preferences from Deductible Choice," NBER Working Papers 11461, National Bureau of Economic Research, Inc.
- Camerer, Colin F. & Hogarth, Robin M., 1999.
"The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework,"
1059, California Institute of Technology, Division of the Humanities and Social Sciences.
- Camerer, Colin F & Hogarth, Robin M, 1999. "The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 7-42, December.
- Donkers, A.C.D. & Melenberg, B. & Soest, A.H.O. van, 1999.
"Estimating Risk Attitudes Using Lotteries; A Large Sample Approach,"
1999-12, Tilburg University, Center for Economic Research.
- Donkers, Bas & Melenberg, Bertrand & Van Soest, Arthur, 2001. " Estimating Risk Attitudes Using Lotteries: A Large Sample Approach," Journal of Risk and Uncertainty, Springer, vol. 22(2), pages 165-95, March.
- Günther, Isabel & Harttgen, Kenneth, 2009. "Estimating Households Vulnerability to Idiosyncratic and Covariate Shocks: A Novel Method Applied in Madagascar," World Development, Elsevier, vol. 37(7), pages 1222-1234, July.
- Jeffery Carpenter & Juan Camilo Cardenas, 2006.
"Behavioural Development Economics: Lessons from field labs in the developing world,"
Middlebury College Working Paper Series
0616, Middlebury College, Department of Economics.
- Juan Camilo Cardenas & Jeffrey Carpenter, 2008. "Behavioural Development Economics: Lessons from Field Labs in the Developing World," Journal of Development Studies, Taylor & Francis Journals, vol. 44(3), pages 311-338.
- Ellis, Frank, 2000. "Rural Livelihoods and Diversity in Developing Countries," OUP Catalogue, Oxford University Press, number 9780198296966.
- Gerlinde Fellner & Boris Maciejovsky, .
"Risk Attitude and Market Behavior: Evidence from Experimental Asset Markets,"
Papers on Strategic Interaction
2002-34, Max Planck Institute of Economics, Strategic Interaction Group.
- Fellner, Gerlinde & Maciejovsky, Boris, 2007. "Risk attitude and market behavior: Evidence from experimental asset markets," Journal of Economic Psychology, Elsevier, vol. 28(3), pages 338-350, June.
- Robert Holzmann & Steen Jørgensen, 2001.
"Social Risk Management: A New Conceptual Framework for Social Protection, and Beyond,"
International Tax and Public Finance,
Springer, vol. 8(4), pages 529-556, August.
- Robert Holzmann & Steen Jorgensen, 2000. "Social risk management : a new conceptual framework for social protection and beyond," Social Protection Discussion Papers 21314, The World Bank.
- Cheryl Doss & John McPeak & Christopher Barrett, 2006.
"Interpersonal, Intertemporal and Spatial Variation in Risk Perceptions: Evidence from East Africa,"
948, Economic Growth Center, Yale University.
- Doss, Cheryl & McPeak, John & Barrett, Christopher B., 2008. "Interpersonal, Intertemporal and Spatial Variation in Risk Perceptions: Evidence from East Africa," World Development, Elsevier, vol. 36(8), pages 1453-1468, August.
- Alwang, Jeffrey & Siegel, P. B., 1999. "Labor Shortages on Small Landholdings in Malawi: Implications for Policy Reforms," World Development, Elsevier, vol. 27(8), pages 1461-1475, August.
- Yamauchi, Futoshi & Yohannes, Yisehac & Quisumbing, Agnes, 2009.
"Risks, ex-ante actions and public assistance : impacts of natural disasters on child schooling in Bangladesh, Ethiopia and Malawi,"
Policy Research Working Paper Series
4909, The World Bank.
- Yamauchi, Futoshi & Yohannes, Yisehac & Quisumbing, Agnes R., 2009. "Risks, ex-ante actions, and public assistance: Impacts of natural disasters on child schooling in Bangladesh, Ethiopia, and Malawi," IFPRI discussion papers 880, International Food Policy Research Institute (IFPRI).
- Carpenter, Jeffrey P. & Burks, Stephen V. & Verhoogen, Eric, 2004. "Comparing Students to Workers: The Effects of Social Framing on Behavior in Distribution Games," IZA Discussion Papers 1341, Institute for the Study of Labor (IZA).
- van den Berg, Marrit & Fort, Ricardo & Burger, Kees, 2009. "Natural Hazards And Risk Aversion: Experimental Evidence From Latin America," 2009 Conference, August 16-22, 2009, Beijing, China 51394, International Association of Agricultural Economists.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.