Do Risk Preferences Change? Evidence from Panel Data Before and after the Great East Japan Earthquake

60 Pages Posted: 27 Jul 2015 Last revised: 23 Jun 2023

See all articles by Chie Hanaoka

Chie Hanaoka

Toyo University

Hitoshi Shigeoka

Simon Fraser University (SFU); University of Tokyo - University of Tokyo, Graduate School of Public Policy; IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Yasutora Watanabe

University of Tokyo - Graduate School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2015

Abstract

We investigate whether individuals’ risk preferences change after experiencing a natural disaster, specifically, the 2011 Great East Japan Earthquake. Exploiting the panels of nationally representative surveys on risk preferences, we find that men who experienced greater intensity of the Earthquake became more risk tolerant after the Earthquake. Furthermore, these men gamble more, which is consistent with the direction of changes in risk preferences. We find no such pattern for women. Finally, the effects on men’s risk preferences are persistent even five years after the Earthquake at almost the same magnitude as those shortly after the Earthquake.

Suggested Citation

Hanaoka, Chie and Shigeoka, Hitoshi and Watanabe, Yasutora, Do Risk Preferences Change? Evidence from Panel Data Before and after the Great East Japan Earthquake (July 2015). NBER Working Paper No. w21400, Available at SSRN: https://ssrn.com/abstract=2636160

Chie Hanaoka (Contact Author)

Toyo University

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Hitoshi Shigeoka

Simon Fraser University (SFU) ( email )

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University of Tokyo - University of Tokyo, Graduate School of Public Policy ( email )

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Yasutora Watanabe

University of Tokyo - Graduate School of Economics ( email )

Tokyo
Japan

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