Impact of violent crime on risk aversion: Evidence from the mexican drug war

Published

Journal Article

© 2018 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology. Whereas attitudes toward risk play an important role in many decisions over the life course, factors that affect those attitudes are not fully understood. Using longitudinal survey data collected in Mexico before and during the Mexican war on drugs, we investigate how risk attitudes change with variation in insecurity and uncertainty brought on by unprecedented changes in local-area violent crime. Exploiting the fact that the timing, virulence, and spatial distribution of changes in violent crime were unanticipated, we establish there is a rise in risk aversion spread across the entire local population as local-area violent crime increases.

Full Text

Duke Authors

Cited Authors

  • Brown, R; Montalva, V; Thomas, D; Velásquez, A

Published Date

  • December 1, 2019

Published In

Volume / Issue

  • 101 / 5

Start / End Page

  • 892 - 904

Electronic International Standard Serial Number (EISSN)

  • 1530-9142

International Standard Serial Number (ISSN)

  • 0034-6535

Digital Object Identifier (DOI)

  • 10.1162/rest_a_00788

Citation Source

  • Scopus