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Trust, Risk, and Time Preferences After a Natural Disaster: Experimental Evidence from Thailand

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  • Cassar, Alessandra
  • Healy, Andrew
  • von Kessler, Carl

Abstract

Natural disasters constitute a persistent threat to economic welfare in many places, particularly in developing countries. Not only can disasters transform living circumstances, but we provide evidence here that they can lead to important changes in individual preferences. In a series of experiments that we conducted in rural Thailand, we find that the 2004 tsunami led to substantial long-lasting increases in risk aversion, prosocial behavior, and impatience. We use GIS data and survey responses to identify disaster impact, showing that both community-level and individual-level experiences appear to affect preferences in theoretically plausible ways. Our findings have important implications for public policy efforts to address natural disasters.

Suggested Citation

  • Cassar, Alessandra & Healy, Andrew & von Kessler, Carl, 2017. "Trust, Risk, and Time Preferences After a Natural Disaster: Experimental Evidence from Thailand," World Development, Elsevier, vol. 94(C), pages 90-105.
  • Handle: RePEc:eee:wdevel:v:94:y:2017:i:c:p:90-105
    DOI: 10.1016/j.worlddev.2016.12.042
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    References listed on IDEAS

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    1. repec:eee:wdevel:v:104:y:2018:i:c:p:310-325 is not listed on IDEAS
    2. Kevin Luo & Tomoko Kinugasa, 2018. "Do natural disasters influence long-term saving?: Assessing the impact of the 2008 Sichuan earthquake on household saving rates using synthetic control," Discussion Papers 1804, Graduate School of Economics, Kobe University.
    3. Carolina Laureti & Alain De Janvry & Elisabeth Sadoulet, 2017. "Flexible Microfinance Products for Financial Management by the Poor: Evidence from SafeSave," Working Papers CEB 17-036, ULB -- Universite Libre de Bruxelles.
    4. Giovanni Gualtieri & Marcella Nicolini & Fabio Sabatini & Luca Zamparelli, 2018. "Natural Disasters and Demand for Redistribution: Lessons from an Earthquake," Working Papers 2018.15, Fondazione Eni Enrico Mattei.
    5. Gualtieri, Giovanni & Nicolini, Marcella & Sabatini, Fabio & Zamparelli, Luca, 2018. "Natural disasters and demand for redistribution: lessons from an earthquake," MPRA Paper 86445, University Library of Munich, Germany.
    6. repec:eee:wdevel:v:102:y:2018:i:c:p:262-274 is not listed on IDEAS

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