  The study on risk preferences and its potential changes amid natural
catastrophes has been subject of recent study, producing contradictory
findings. An often proposed explanation specifically distinguishes between the
opposite effect of realized and unrealized losses on risk preferences.
Moreover, higher-order risk preferences and its relation to post-disaster
behaviors remain unexplored, despite potential theoretical implications. We
address these gaps in the literature by conducting experiments with 600
individuals post Turkeys 2023 catastrophic earthquake, specifically heavily
affected individuals who are displaced, those who are not and a control group.
Results indicate higher risk-taking in heavily affected individuals when
compared to unaffected individuals. Our results are specifically driven by
affected females. We find no pre existing differences in risk preferences
between earthquake and control areas using 2012 data. Within the heavily
affected group of individuals, higher house damage, our proxy for realized
losses, increases risk aversion. Regarding higher-order risk preferences for
individuals heavily affected by the earthquake, we find that prudence is
positively associated with selfprotective behaviors after the earthquake,
specifically internal migration and/or displacement. While precautionary
savings shows initially no correlation to prudence, a positive association
emerges when considering that prudence is also related to occupational choices,
with individuals with stable incomes and who save being more prudent. Our
results contribute insights into how disasters influence risk preferences,
specifically aiming to address contradictory findings in the literature, while
presenting novel evidence on the relationship between prudence and post-natural
disaster behaviors.
