Living like there's no tomorrow: The psychological effects of an earthquake on savings and spending behavior
Natural disasters impact economies not only through physical damages, but also by affecting survivors emotionally and psychologically. This can alter their economic behavior, in ways that remain poorly understood. We present a model of post-disaster savings that reveals two opposing tendencies: the...
| Main Authors: | , , , |
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| Format: | Journal Article |
| Language: | Inglés |
| Published: |
Elsevier
2019
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/147366 |
| _version_ | 1855514083617406976 |
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| author | Filipski, Mateusz J. Jin, Ling Zhang, Xiaobo Chen, Kevin Z. |
| author_browse | Chen, Kevin Z. Filipski, Mateusz J. Jin, Ling Zhang, Xiaobo |
| author_facet | Filipski, Mateusz J. Jin, Ling Zhang, Xiaobo Chen, Kevin Z. |
| author_sort | Filipski, Mateusz J. |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Natural disasters impact economies not only through physical damages, but also by affecting survivors emotionally and psychologically. This can alter their economic behavior, in ways that remain poorly understood. We present a model of post-disaster savings that reveals two opposing tendencies: the need to self-insure through increased savings, and the drive to “enjoy life while it lasts” through increased spending. We use panel datasets from China’s Sichuan province, and isolate psychological impacts by focusing on those who lived in quake areas but did not themselves suffer damages or injuries. Although they did not bear economic losses, they saved less, spent more on alcohol, and played majiang (a Chinese game) more often, suggesting that the “no tomorrow” tendency dominated over the precautionary tendency. The magnitude of the savings rate impact, a drop of 0.17 percentage points for each percent of distance closer to the epicenter, is economically significant, and persists in the medium term. |
| format | Journal Article |
| id | CGSpace147366 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2019 |
| publishDateRange | 2019 |
| publishDateSort | 2019 |
| publisher | Elsevier |
| publisherStr | Elsevier |
| record_format | dspace |
| spelling | CGSpace1473662025-02-24T06:47:29Z Living like there's no tomorrow: The psychological effects of an earthquake on savings and spending behavior Filipski, Mateusz J. Jin, Ling Zhang, Xiaobo Chen, Kevin Z. disasters natural disasters earthquakes capacity development psychological factors economic behaviour spending savings Natural disasters impact economies not only through physical damages, but also by affecting survivors emotionally and psychologically. This can alter their economic behavior, in ways that remain poorly understood. We present a model of post-disaster savings that reveals two opposing tendencies: the need to self-insure through increased savings, and the drive to “enjoy life while it lasts” through increased spending. We use panel datasets from China’s Sichuan province, and isolate psychological impacts by focusing on those who lived in quake areas but did not themselves suffer damages or injuries. Although they did not bear economic losses, they saved less, spent more on alcohol, and played majiang (a Chinese game) more often, suggesting that the “no tomorrow” tendency dominated over the precautionary tendency. The magnitude of the savings rate impact, a drop of 0.17 percentage points for each percent of distance closer to the epicenter, is economically significant, and persists in the medium term. 2019-04-17 2024-06-21T09:13:38Z 2024-06-21T09:13:38Z Journal Article https://hdl.handle.net/10568/147366 en https://hdl.handle.net/10568/149760 https://hdl.handle.net/10568/149762 Open Access Elsevier Filipski, Mateusz J.; Jin, Ling; Zhang, Xiaobo; and Chen, Kevin Z. 2019. Living like there's no tomorrow: The psychological effects of an earthquake on savings and spending behavior. European Economic Review 116(July 2019): 107-128. https://doi.org/10.1016/j.euroecorev.2019.04.004 |
| spellingShingle | disasters natural disasters earthquakes capacity development psychological factors economic behaviour spending savings Filipski, Mateusz J. Jin, Ling Zhang, Xiaobo Chen, Kevin Z. Living like there's no tomorrow: The psychological effects of an earthquake on savings and spending behavior |
| title | Living like there's no tomorrow: The psychological effects of an earthquake on savings and spending behavior |
| title_full | Living like there's no tomorrow: The psychological effects of an earthquake on savings and spending behavior |
| title_fullStr | Living like there's no tomorrow: The psychological effects of an earthquake on savings and spending behavior |
| title_full_unstemmed | Living like there's no tomorrow: The psychological effects of an earthquake on savings and spending behavior |
| title_short | Living like there's no tomorrow: The psychological effects of an earthquake on savings and spending behavior |
| title_sort | living like there s no tomorrow the psychological effects of an earthquake on savings and spending behavior |
| topic | disasters natural disasters earthquakes capacity development psychological factors economic behaviour spending savings |
| url | https://hdl.handle.net/10568/147366 |
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