PT - JOURNAL ARTICLE AU - Cameron, Lisa AU - Shah, Manisha TI - Risk-Taking Behavior in the Wake of Natural Disasters AID - 10.3368/jhr.50.2.484 DP - 2015 Mar 31 TA - Journal of Human Resources PG - 484--515 VI - 50 IP - 2 4099 - http://jhr.uwpress.org/content/50/2/484.short 4100 - http://jhr.uwpress.org/content/50/2/484.full SO - J Hum Resour2015 Mar 31; 50 AB - We investigate whether experiencing a natural disaster affects risk-taking behavior. We conduct standard risk games (using real money) with randomly selected individuals in rural Indonesia. We find that individuals who recently suffered a flood or earthquake exhibit more risk-aversion. Experiencing a natural disaster causes people to perceive that they now face a greater risk of a future disaster. We conclude that this change in perception of background risk causes people to take fewer risks. We provide evidence that experimental risk behavior is correlated with real-life risk behavior, highlighting the importance of our results.