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Does flood experience modify risk preferences? Evidence from an artefactual field experiment in Vietnam
Language
EN
Article de revue
This item was published in
Geneva Risk and Insurance Review. 2019-12-11, vol. 45, n° 1, p. 36-74
English Abstract
We conducted an artefactual field experiment in Vietnam to investigate whether and how experiencing a natural disaster affects individual attitudes toward risks. Using experimental and real household data, we show that ...Read more >
We conducted an artefactual field experiment in Vietnam to investigate whether and how experiencing a natural disaster affects individual attitudes toward risks. Using experimental and real household data, we show that households in villages affected by a flood in recent years exhibit more risk aversion, compared with individuals living in similar but unaffected villages. Interestingly, this result holds for the loss domain, but not the gain domain. In line with Prospect Theory, Vietnamese households distort probabilities. The distortion is related to aid received and social networks participation, but is unrelated to flood experience.Read less <
English Keywords
Risk preferences
Non-expected utility
Flood
Vietnam
Field experiment