Are people always more risk averse after disasters? Surveys after a heavy snow‐hit and a major earthquake in China in 2008

Abstract

China suffered both a heavy snow-hit and a major earthquake in 2008. To investigate the effects of disasters on risky decision making, opportunity samples were obtained by recruiting residents in both devastated and non-devastated areas. In a survey (Study 1) conducted shortly after the heavy snow-hit, we found that people were not always more risk averse after a disaster as previous studies had claimed and that they were inclined to approach an option with 'low probability associated gain' and to avoid an option with 'low probability associated loss'. These findings were replicated in a consecutive survey (Study 2) conducted after the Wenchuan earthquake. It was further found that the popularity of both insurance and lottery, which presumably contributed to overweighing of small probabilities, was detected to have been enhanced with substantial exposure to the earthquake disaster. The implications of these findings for risk education and government policy making were discussed.

Perceiving Risk in a Dangerous World: Associations between Life Experiences and Risk Perceptions

“…However, not recognizing an adequate amount of risk can leave one unprepared to face adversity, should it arise. Even when directly impacted by some community disasters (e.g., earthquakes and tornadoes), people appear to recover fairly quickly from the increased risk perceptions associated with them and maintain a comparative optimism, while some disasters (e.g., nuclear accidents) result in more persistent, pessimistic changes in perceived vulnerabilities (Dolinski, Gromski, & Zawisza, 1987;Li et al, 2011;Suls et al, 2013). Examining comparative optimism in those who have experienced violent life events could be an important next step in this line of research.…”

“…Although some research suggests that people become more sensitive to particular risks after experiencing a disaster (Greening, Dollinger, & Pitz, 1996;Li, Li, Wang, Rao, & Liu, 2011), we hypothesized that experiencing violent events in general would predict perceiving higher risk of a future natural disaster over and above personal prior experience with natural disasters specifically. While the availability heuristic suggests that being able to easily recall a similar event should bias predictions of subsequent similar events (Tversky & Kahneman, 1974), CEST (Kirkpatrick & Epstein, 1992) and fuzzy trace theory (Reyna, 2004) suggest that experiencing any violent events may have the same effect.…”

Risk, Loss, and Ambiguity Aversion after a Natural Disaster

“…Eckel et al (2009) find that low-income residents of New Orleans impacted by hurricane Katrina were significantly more risk loving, not more risk averse. Finally, Li et al (2011) find that both a heavy snow and an earthquake event in China resulted in less risk aversion over gains but more risk aversion over losses, while Reynaud and Aubert (2014) find that historical flooding in rural Vietnam resulted in more risk aversion in the loss domain only. The contradictions found in this literature suggests that impacts are likely to be more nuanced than previously investigated.…”

“…In most of the studies above, the risk preference elicitations focus only on measures of risk over gains where probabilities are known (the exceptions are Reynaud and Aubert (2014), Li et al (2011), andVoors et al (2012) which also look at risk over losses). However, the effect of experiencing a natural disaster (or other disruptive event) on a person's risk preferences is likely to be more complicated.…”

Mapping Individual Earthquake Preparedness in China

“…Within the Chinese cultural context, a prior analysis revealed that people having disaster experience (heavy-snow and earthquake in 2008) were not always more risk averse (Li et al, 2011). By comparing survey results from two cities with different smog 5 exposures, Wei et.al.…”