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Change in time preferences: Evidence from the Great East Japan Earthquake

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  • Akesaka, Mika

Abstract

This study examines whether individuals’ time preferences are affected by the damage caused by the tsunami resulting from the Great East Japan Earthquake of 2011 using panel surveys before and after the earthquake. When the change in time preferences is measured using the (β, δ) model, present bias tendency increases (shrinking β), although there is no statistically significant change in the time discount factor (δ) for those affected by the tsunami. The hyperbolic discounting dummy also shows an increase in time inconsistency. This change persists even five years after the earthquake.

Suggested Citation

  • Akesaka, Mika, 2019. "Change in time preferences: Evidence from the Great East Japan Earthquake," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 239-245.
  • Handle: RePEc:eee:jeborg:v:166:y:2019:i:c:p:239-245
    DOI: 10.1016/j.jebo.2019.08.013
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    More about this item

    Keywords

    Natural disasters; Preference stability; Time preference; Present bias;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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