Effect of experiencing economic crisis on risk perception and risk attitude

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This book examines how economic crises shape individual risk perception and attitudes in South Korea through economic experiments and two case studies from the labour and financial markets. Utilizing diverse methods, it confirms that experiencing an economic crisis significantly influences risk perception and attitudes. The experiments demonstrate that such experiences lead to increased risk aversion. The labour market case focuses on young adult unemployment, analyzing how risk aversion affects job-seeking behaviors, particularly in the context of the South Korean 9th class government officers’ recruitment exam. Additionally, the financial market case reveals a "learning effect," where repeated exposure to economic crises alters risk perceptions. Analysis of the stock market shows that South Koreans have shifted from risk aversion to risk-seeking behavior due to their ongoing experiences with economic shocks. By investigating individual risk propensities, the book addresses crucial aspects of market behavior and the impact of economic shocks on risk-related actions. It also offers insights for policymakers regarding effective social risk communication and necessary policies to foster balanced risk perceptions and attitudes.