The Impact of Violence on Individual Risk Preferences | Land Portal

Resource information

Date of publication: 
November 2015
Resource Language: 
ISBN / Resource ID: 
oai:openknowledge.worldbank.org:10986/22862
Copyright details: 
CC BY 3.0 IGO

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.

Authors and Publishers

Author(s), editor(s), contributor(s): 

Jakiela, Pamela
Ozier, Owen

Publisher(s): 

The World Bank is a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the ordinary sense but a unique partnership to reduce poverty and support development.

Data provider

The World Bank is a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the ordinary sense but a unique partnership to reduce poverty and support development.

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