Catastrophic Risk: Waking Up to the Reality of a Pandemic?
37 Pages Posted: 10 Apr 2020
Date Written: March 27, 2020
Will a major shock awaken US citizens to the threat of catastrophic pandemic risk? Using a natural experiment administered both before and after the 2014 West African Ebola Outbreak, our evidence suggests “no”. Our results show that prior to the Ebola scare, US citizens were relatively complacent and placed a low relative priority on public spending to prepare for a pandemic disease outbreak relative to an environmental disaster risk (e.g., Fukushima) or a terrorist attack (e.g., 9/11). After the Ebola scare, the average citizen did not over-react to the risk. This flat reaction was unexpected given the well-known availability heuristic—people tend to over-weigh judgments of events more heavily toward more recent information. In contrast, the average citizen continued to value pandemic risk less relative to terrorism or environmental risk.
Keywords: Risk, Behavioral, Pandemic, Ebola, COVID-19
JEL Classification: Q95, H12, H41, D03
Suggested Citation: Suggested Citation