Do Risk Preferences Change? Evidence from the Great East Japan Earthquake

68 Pages Posted: 17 Apr 2014 Last revised: 2 Feb 2017

See all articles by Chie Hanaoka

Chie Hanaoka

Kyoto Sangyo University

Hitoshi Shigeoka

Simon Fraser University (SFU); 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: January 30, 2017

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.

Keywords: Risk preference, Gender difference, Great East Japan Earthquake, Risk-taking behavior, Persistence, Panel data

JEL Classification: D81, Q54, C23, J16

Suggested Citation

Hanaoka, Chie and Shigeoka, Hitoshi and Watanabe, Yasutora, Do Risk Preferences Change? Evidence from the Great East Japan Earthquake (January 30, 2017). Available at SSRN: https://ssrn.com/abstract=2425396 or http://dx.doi.org/10.2139/ssrn.2425396

Chie Hanaoka

Kyoto Sangyo University ( email )

Kyoto City
Japan

Hitoshi Shigeoka (Contact Author)

Simon Fraser University (SFU) ( email )

8888 University Drive
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Canada
(778)782-5348 (Phone)
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HOME PAGE: http://sites.google.com/site/hshigeoka/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yasutora Watanabe

University of Tokyo - Graduate School of Economics ( email )

Tokyo
Japan

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