Civil War, Natural Disaster and Risk Preferences: Evidence from Sri Lankan Twins

42 Pages Posted: 19 Nov 2018

See all articles by Nathan Kettlewell

Nathan Kettlewell

University of Sydney

Fruhling Rijsdijk

King's College London - International Development Institute; King's College London

Athula Sumathipala

Keele University

Agnieszka Tymula

Bocconi University

Helena Zavos

King's College London

Nicholas Glozier

The University of Sydney

Abstract

We estimate whether risk preferences are affected by traumatic events by using a unique survey of Sri Lankan twins which contains information on individual's exposure to the 2004 Indian Ocean Tsunami, participation as a combatant in the civil war, validated measures of mental health and risk preferences, and a rich set of control variables. Our estimation strategy utilises variation in experiences within twin pairs and allows us to explore whether preference changes are driven by wealth shocks and/or changes in mental health. We find that both events lead to less risk aversion, a result that is not driven by mental health or wealth changes.

Keywords: risk preferences, natural disaster, civil war, twin study

JEL Classification: D74, D81, D91, Q54

Suggested Citation

Kettlewell, Nathan and Rijsdijk, Fruhling and Sumathipala, Athula and Tymula, Agnieszka and Zavos, Helena and Glozier, Nicholas, Civil War, Natural Disaster and Risk Preferences: Evidence from Sri Lankan Twins. IZA Discussion Paper No. 11901, Available at SSRN: https://ssrn.com/abstract=3286160

Nathan Kettlewell (Contact Author)

University of Sydney ( email )

Rm 370 Merewether (H04)
The University of Sydney
Sydney, NSW 2006 2008
Australia

HOME PAGE: http://sydney.edu.au/arts/economics/staff/profiles/nathan.kettlewell.php

Fruhling Rijsdijk

King's College London - International Development Institute

United Kingdom

King's College London

Strand
London, England WC2R 2LS
United Kingdom

Athula Sumathipala

Keele University

Keele, ST5 5BG
United Kingdom

Agnieszka Tymula

Bocconi University ( email )

via sarfatti 25
Milan, 20136
Italy

Helena Zavos

King's College London

Strand
London, WC2R 2LS
United Kingdom

Nicholas Glozier

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

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