Natural disaster and risk preferences: evidence from Sri Lankan twins

Nathan Kettlewell; Fruhling Rijsdijk; Sisira Siribaddana; Athula Sumathipala; Agnieszka Tymula; Helena Zavos; Nicholas Glozier

doi:10.1080/00036846.2023.2168616

Natural disaster and risk preferences: evidence from Sri Lankan twins

Nathan Kettlewell, Fruhling Rijsdijk, Sisira Siribaddana, Athula Sumathipala, Agnieszka Tymula, Helena Zavos, Nicholas Glozier

Research output: Contribution to journal › Article › peer-review

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, validated measures of mental health and risk preferences, and a rich set of control variables. Our estimation strategy utilizes variation in experiences within twin pairs and allows us to explore wealth shocks and/or changes in mental health as mechanisms. We find that exposure to the tsunami lead to less risk aversion, a result that is not explained by mental health.

Original language	English
Journal	Applied Economics
Early online date	26 Jan 2023
DOIs	https://doi.org/10.1080/00036846.2023.2168616
Publication status	E-pub ahead of print - 26 Jan 2023

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AU - Siribaddana, Sisira

AU - Sumathipala, Athula

AU - Tymula, Agnieszka

AU - Zavos, Helena

AU - Glozier, Nicholas

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AB - 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, validated measures of mental health and risk preferences, and a rich set of control variables. Our estimation strategy utilizes variation in experiences within twin pairs and allows us to explore wealth shocks and/or changes in mental health as mechanisms. We find that exposure to the tsunami lead to less risk aversion, a result that is not explained by mental health.

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Natural disaster and risk preferences: evidence from Sri Lankan twins

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