The Impact of Violence on Individual Risk Preferences: Evidence from a Natural Experiment

By Pamela Jakiela, Owen Ozier. Review of Economics and Statistics, 2015

135 citations recorded by the source corpus.

Abstract We estimate the impact of Kenya's postelection crisis on individual risk preferences. The crisis interrupted a longitudinal survey of more than five thousand Kenyan youth, creating plausibly exogenous variation in exposure to civil conflict prior to the survey. Our results indicate that the postelection crisis sharply increased individual risk aversion. Immediately after the crisis, the fraction of subjects displaying extreme risk aversion increased by more than 80%. Findings remain robust when we use an IV estimation strategy that exploits random assignment of respondents to waves of surveying. The crisis also affected trust, social capital, and beliefs about the economy.

Subfields: Demography, Safety Research, Soil Science

View Paper: https://www.semanticscholar.org/paper/0b06c128c3529b2432f28ec0dc97968eac73ce28

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Demography

1. Sascha O. Becker
2. E. Zhuravskaya
3. Irena Grosfeld
4. Nico Voigtländer
5. Andreas Ferrara
6. Pauline Grosjean
7. F. Caicedo
8. Nathan Nunn

In Safety Research

1. Nico Voigtländer
2. Andreas Ferrara
3. Sascha O. Becker
4. Pauline Grosjean
5. E. Zhuravskaya

In Soil Science

1. Andreas Ferrara
2. Sascha O. Becker
3. Pauline Grosjean

Citations in the corpus

• Do Risk Preferences Change? Evidence from the Great East Japan Earthquake (2018, unknown): “Similarly, studies on the impact of conflicts or violence also find conflicting results: while some show increased risk aversion (Moya 2012, Kim and Lee 2014, Callen et al. 2014, Jakiela and Ozier 2015, Brown et al. 2017), others find decreased risk aversion (Voors et al. 2012).”
• Forced Migration and Human Capital: Evidence from Post-WWII Population Transfers (2018, background): “…Blattman and Miguel (2010) for a review of the literature on exposure to violence, and Voors, Nillesen, Verwimp, Bulte, Lensink, and van Soest (2012), Bauer, Cassar, Chytilová, and Henrich (2014), Cassar, Grosjean, and Whitt (2013), or Jakiela and Ozier (2018) for more recent contributions.”
• Consequences of forced migration: A survey of recent findings (2019, background): “See also Jakiela and Ozier (2018) for recent evidence on preference shifts resulting from violence after Kenya’s 2007 post-election crisis.”
• Impact of Violent Crime on Risk Aversion: Evidence from the Mexican Drug War (2019, unknown): “Several recent studies in economics have empirically examined whether measured risk attitudes are responsive to major changes in an individual’s environment, including earthquakes, floods, tsunamis, financial crisis, and outbreaks of violent conflict (Callen et al., 2014; Cameron and Shah, 2013; Cas”