We estimate 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. We measure individual risk preferences using hypothetical lottery choice questions which we validate by showing that they predict migration and entrepreneurship in the cross-section. Our results indicate that the post-election violence sharply increased individual risk aversion. Findings remain robust when we use an IV estimation strategy that exploits random assignment of respondents to waves of surveying.
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JEL codes: C91, C93, D01, D74, D81
Recommended citation: Jakiela, Pamela, and Owen Ozier. "The impact of violence on individual risk preferences: evidence from a natural experiment." Review of Economics and Statistics 101, no. 3 (2019): 547-559.