Working Paper

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

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Jakiela, Pamela
dc.contributor.author
Ozier, Owen
dc.date.accessioned
2015-11-05T15:57:56Z
dc.date.available
2015-11-05T15:57:56Z
dc.date.issued
2015-10
dc.date.lastModified
2017-12-14T04:14:59Z
dc.description.abstract
This study estimates the impact of Kenya’s post-election violence on individual risk preferences. Because the crisis interrupted a longitudinal survey of more than five thousand Kenyan youth, this timing creates plausibly exogenous variation in exposure to civil conflict by the time of the survey. The study measures individual risk preferences using hypothetical lottery choice questions, which are validated by showing that they predict migration and entrepreneurship in the cross-section. The results indicate that the post-election violence sharply increased individual risk aversion. Immediately after the crisis, the fraction of subjects who are classified as either risk neutral or risk loving dropped by roughly 26 percent. The findings remain robust to an IV estimation strategy that exploits random assignment of respondents to waves of surveying.
en
dc.identifier
http://documents.worldbank.org/curated/en/2015/10/25155020/impact-violence-individual-risk-preferences-evidence-natural-experiment
dc.identifier.uri
http://hdl.handle.net/10986/22862
dc.language
English
dc.language.iso
en_US
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper;No. 7440
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
EMPLOYMENT
dc.subject
RISKS
dc.subject
ECONOMIC GROWTH
dc.subject
STORM
dc.subject
PRODUCTION
dc.subject
UTILITY FUNCTIONS
dc.subject
ERRORS
dc.subject
INCOME
dc.subject
INTEREST
dc.subject
UTILITY MAXIMIZATION
dc.subject
STRATEGIES
dc.subject
INFORMATION
dc.subject
SERVICES
dc.subject
PUBLIC SERVICES
dc.subject
EFFECTS
dc.subject
INCENTIVES
dc.subject
EXPERIMENTAL DATA
dc.subject
CAPACITY BUILDING
dc.subject
INDIFFERENCE CURVES
dc.subject
VARIABLES
dc.subject
DAMAGES
dc.subject
ASSOCIATIONS
dc.subject
WEALTH
dc.subject
RISK AVERSE
dc.subject
PROBABILITIES
dc.subject
EVACUEES
dc.subject
TRENDS
dc.subject
RISK AVERSE INDIVIDUALS
dc.subject
BIASES
dc.subject
DEVELOPMENT
dc.subject
CHOICE
dc.subject
LABOR MARKET
dc.subject
DATA
dc.subject
DECISION THEORY
dc.subject
SAVINGS
dc.subject
EXPERIMENTAL ECONOMICS
dc.subject
DEVELOPMENT ECONOMICS
dc.subject
PROBABILITY
dc.subject
ECONOMIC DOWNTURNS
dc.subject
ECONOMETRICS
dc.subject
EXTERNALITIES
dc.subject
EXPECTED RETURN
dc.subject
UNEMPLOYED
dc.subject
MIGRATION
dc.subject
STANDARD ERRORS
dc.subject
NATURAL DISASTERS
dc.subject
UTILITY THEORY
dc.subject
MARKETS
dc.subject
FORECASTING
dc.subject
ORGANIZATIONS
dc.subject
DISASTERS
dc.subject
INDICATORS
dc.subject
LOTTERY
dc.subject
EXPECTED VALUES
dc.subject
NEGOTIATIONS
dc.subject
LABOR
dc.subject
FARMERS
dc.subject
LOTTERIES
dc.subject
UTILITY
dc.subject
FINANCE
dc.subject
EFFICIENCY
dc.subject
ECONOMIC RESEARCH
dc.subject
TECHNOLOGY
dc.subject
OPINION POLLS
dc.subject
HUMAN CAPITAL
dc.subject
RISK NEUTRAL
dc.subject
EARTHQUAKE
dc.subject
ACCOUNTABILITY
dc.subject
ECONOMIC COSTS
dc.subject
RISK LOVING
dc.subject
VALIDITY
dc.subject
VALUE
dc.subject
BANK
dc.subject
CREDIT
dc.subject
NEUTRALITY
dc.subject
UTILITY FUNCTION
dc.subject
VICTIMS
dc.subject
VICTIM
dc.subject
EXPECTED VALUE
dc.subject
INCENTIVE EFFECTS
dc.subject
PROPERTY
dc.subject
DECISION MAKING
dc.subject
MEASUREMENT
dc.subject
COUNTING
dc.subject
SURVEYS
dc.subject
ECONOMICS
dc.subject
INSTRUMENTAL VARIABLES
dc.subject
MANAGEMENT
dc.subject
GOVERNANCE
dc.subject
BUSINESS CYCLES
dc.subject
SOCIAL CAPITAL
dc.subject
SLUMS
dc.subject
TRADE
dc.subject
LAND
dc.subject
THEORY
dc.subject
WARS
dc.subject
WAR
dc.subject
HURRICANE
dc.subject
INVESTMENT
dc.subject
EXPECTED UTILITY
dc.subject
STATISTICS
dc.subject
RISK
dc.subject
LAW
dc.subject
CIVIL WAR
dc.subject
RIOTS
dc.subject
RANDOMIZATION
dc.subject
RISK AVERSION
dc.subject
ENTREPRENEURSHIP
dc.subject
LABOUR
dc.subject
COLLECTIVE ACTION
dc.subject
GOVERNMENTS
dc.subject
OUTCOMES
dc.subject
POLITICAL PARTICIPATION
dc.subject
DEVELOPMENT POLICY
dc.title
The Impact of Violence on Individual Risk Preferences
en
dc.title.subtitle
Evidence from a Natural Experiment
en
dc.type
Working Paper
en
okr.date.disclosure
2015-10-14
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.doctype
Publications & Research
okr.docurl
http://documents.worldbank.org/curated/en/2015/10/25155020/impact-violence-individual-risk-preferences-evidence-natural-experiment
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-7440
okr.identifier.externaldocumentum
090224b083145898_1_0
okr.identifier.internaldocumentum
25155020
okr.identifier.report
WPS7440
okr.imported
true
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/10/14/090224b083145898/1_0/Rendered/PDF/The0impact0of00a0natural0experiment.pdf
en
okr.region.administrative
Africa
okr.region.country
Kenya
okr.topic
Labor Policies
okr.topic
Hazard Risk Management
okr.topic
Urban Development
okr.topic
Social Protections and Labor
okr.topic
Macroeconomics and Economic Growth :: Economic Theory & Research
okr.unit
Human Development and Public Services Team, Development Research Group

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