Do adversarial environmental conditions create social cohesion? We provide new answers to this question by exploiting spatial and temporal variation in exposure to earthquakes across Chile. Using a variety of methods and controlling for a number of socio-economic variables, we find that exposure to earthquakes has a positive effect on several indicators of social cohesion. Social cohesion increases after a big earthquake and slowly erodes in periods where environmental conditions are less adverse. Our results contribute to the current debate on whether and how environmental conditions shape formal and informal institutions.

This paper focuses on the optimal allocation between health and lifestyle choices when society is concerned about forgiveness. Based on the idea of fresh starts, we construct a social ordering that permits us to make welfare assessments when it is acceptable to compensate individuals who have mismanaged their initial resources. Our social rule also allows for the inclusion of the fairness and responsibility approach in the model. Grounded on basic ethical principles, we propose the application of the minimax criterion to the existing distance between the individual's final bundle and her ideal choice. Keywords fairness

Forgiveness is an ethical ideal that advocates that a fresh start should be conferred upon those individuals who have changed their preferences and regret their previous decisions. Despite the ethical debate that such an idea generates, only a few papers have dealt with this issue in depth, and they have just focused on the case of full compensation for regret. Therefore, based on efficiency, robustness, and ethical requirements, we characterise a social ordering function that formally connects the ideal of forgiveness to the problem of compensating individuals when they differ in both their preferences and their initial endowment. This social ordering allows us to rank allocations that may or may not be associated with different concerns for forgiveness. Specifically, it proposes reducing inequality between reference-comparable budget sets.

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In a model where individuals differ in both their health care needs and their lifestyle preferences, we examine the fair provision of health care when those who regret their initial decisions are granted a fresh start. By considering that each agent chooses how to allocate a given amount of resources between medical and non-medical consumption, we characterise the scheme of taxes and health treatments that maximises social preferences. These preferences allow the planner to make welfare assessments when it is acceptable to compensate agents who have changed their preferences and/or who are endowed with a bad medical disposition. We show that the optimal tax scheme does not only pay additional treatments for those who are not in a good health state, but also protectively induces agents to reduce their non-medical consumption in order to limit a possible future regret.