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Trust and Trustworthiness in the Aftermath of Natural Disasters: Experimental Evidence from the 2010 Chilean Earthquake

Listed author(s):
  • Alberto E. Chong

    ()

    (George Washington University)

  • David A. Fleming

    ()

    (The Pennsylvania State University and The NERCRD)

  • Hernán D. Bejarano

    ()

    (The Pennsylvania State University)

Peoples' behavior in the aftermath of natural disasters may depend critically on various conditions. In this paper we postulate three conditions, likely to occur after massive natural disasters, that can adversely affect the trusting behavior of people within communities: rivalry for scarce relief and recovery recourses, increment of information asymmetries between agents (what we call aftermath moral hazard) that provides excuses to break pre-established-social contracts, and migration or social displacement of people. To investigate this issue a series of trust games were conducted in Chile to analyze whether the 2010 earthquake affected the trust and trustworthiness of villagers in rural areas. Experiments were conducted one year after the occurrence of the earthquake in a group of villages that were heavily affected by this disaster and in a group of villages that were not affected (villages that act as control group). Game outcomes and additional socioeconomic data collected with surveys are compared and analyzed by statistical tests and regressions. We find that trust levels (and most socioeconomic characteristics of participants) are not statistically different between groups. However, we find that trustworthiness levels of affected villages are lower than levels observed in control villages, supporting our argument that aftermath conditions can negatively affect trusting behavior. Results are important in assessing vulnerability and resilience to natural disasters, and therefore relevant for policy regarding aid and recovery of communities affected by these types of events.

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File URL: http://www.gwu.edu/~iiep/assets/docs/papers/Chong_IIEPWP2011-15.pdf
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Paper provided by The George Washington University, Institute for International Economic Policy in its series Working Papers with number 2011-15.

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Length: 37 pages
Date of creation: Oct 2011
Handle: RePEc:gwi:wpaper:2011-15
Contact details of provider: Web page: http://www.gwu.edu/~iiep/
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