Scared Straight or Scared to Death? The Effect of Risk Beliefs on Risky Behaviors

52 Pages Posted: 20 Jun 2016 Last revised: 19 Feb 2018

Jason Kerwin

University of Minnesota - Twin Cities - Department of Applied Economics

Date Written: February 9, 2018

Abstract

This paper tests a model of risk compensation that allows for “fatalism”: higher risks lead to more risk-taking, rather than less. Fatalism can be rational if the risk of each act exceeds a threshold value. I test this prediction by randomizing the provision of information about HIV risks in Malawi, and break down the risk elasticity of sexual risk-taking by people’s initial risk beliefs. Matching the model’s predictions, this elasticity varies from -2.3 for the lowest to 2.9 for the highest beliefs. Fatalism is more pronounced among people who think they may be HIV-positive, consistent with the model’s mechanism.

Keywords: Risk Compensation, Economic Epidemiology, Health Economics, HIV/AIDS, Development Economics

JEL Classification: I12, I15, J10, O12

Suggested Citation

Kerwin, Jason, Scared Straight or Scared to Death? The Effect of Risk Beliefs on Risky Behaviors (February 9, 2018). Available at SSRN: https://ssrn.com/abstract=2797493 or http://dx.doi.org/10.2139/ssrn.2797493

Jason Kerwin (Contact Author)

University of Minnesota - Twin Cities - Department of Applied Economics ( email )

MN
United States

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