RAPID: Ecological Shocks, Risk Perception, and Economic Decision Making

University Of Utah, Salt Lake City UT

Investigators

Abstract

Livestock management is plagued by two major sources of risk: environmental variability and economic security. This is experienced more acutely in rural and arid settings, where infrastructural development and market access may be more limited, and where drought contributes to lower nutrient quality impacting livestock outcomes (weight loss, disease and parasite susceptibility, and mortality). Despite the risks to herding associated with ecological shocks, little Is known about how economic forecasting varies among households. This project will test whether models that have been used in simulations and laboratory settings in behavioral ecology to understand positive and negative shocks on economic behavior can also be applied in a natural experiment to evaluate variation in risk exposure, shock categorization, and economic forecasting. The research explores household decision-making in the aftermath of a major hurricane. Critical data and findings about the relationship between ecological shock, risk preference, and economic decision-making will be disseminated to organizations and officials to assist with future economic planning. The project also provides training for graduate and undergraduate students in methods of rigorous, scientific data collection and analysis, builds capacity for conducting future scientific work, and broadens the participation of groups historically underrepresented in science. The researchers explore 1) how variation in hurricane-induced asset loss influence people to categorize it as either positive or negative, and 2) how ecological shock categorization (positive vs negative) and prior condition (good vs poor) influences how people reason about future ecological conditions, herd management strategies, and their likelihood for engaging in productive labor. These questions will be explored using semi-structured interviews and surveys from 100 households across four communities. Data collection will be oriented toward documenting how individuals characterize the range of variation in post-hurricane household losses, how they perceive loss from the recent hurricane compared to past catastrophic anthropogenic disasters, and what projections they have with respect to future ecological shocks and economic behavior. Studies of disasters in anthropology, development economics, and other scientific fields have focused on the negative shocks that natural disaster events have on risk preferences and economic decision-making, seldom exploring what positive ecological shocks may be emerging in post-disaster contexts. Behavioral ecologists have modeled positive and negative shocks on economic behavioral in simulated models and in laboratory environments, but not in naturalistic settings. This project conducts a novel natural experiment in this post-disaster context. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.