Recovering Risk Aversion After Disaster: The Role of Confidence in Elementary School Students

In many developing countries, natural disasters are a major factor hindering economic growth. Disasters cause not only physical damage but also profound psychological effects on survivors. People who experience large-scale disasters in particular tend to become risk-averse, a tendency observed in multiple countries, suggesting it is likely a universal phenomenon. Excessive risk aversion suppresses actions essential for economic development, such as adopting new technologies or starting businesses, thereby hindering the long-term growth of developing countries.

While this “increased post-disaster risk aversion” has garnered attention in recent years, research on effective intervention methods to restore it to pre-disaster levels remains scarce. Existing research indicates that confidence strongly influences risk-preference decisions, and gender differences in confidence have been shown to create significant variations in risk aversion (Niederle and Vesterlund, 2007). This finding suggests that interventions to boost confidence post-disaster could potentially mitigate excessively heightened risk aversion.

This study will conduct a randomized controlled trial (RCT) targeting elementary school students in Hmawbi Township, Myanmar, which suffered damage from a major earthquake in March 2025. The participants are 1,007 fourth-grade students enrolled in three schools, divided into three groups for a 12-week intervention: a control group with no intervention, a group receiving a success recall intervention, and a group receiving both a success recall intervention and a praise intervention. The intervention consists of activities designed to evoke confidence by describing past successful experiences, supplemented by standardized praise from teachers.

The intervention's effectiveness will be evaluated by measuring risk preferences and confidence before and after the intervention. Risk avoidance will be assessed using the “Pencil Risk Task” at baseline and the “Balloon Analogue Risk Task (BART)” at endline. Confidence will be measured through self-assessment using the “Retrospective Self-Appraisal Scale.”

The purpose of this study is to verify whether an intervention to enhance confidence in elementary school students who have experienced natural disasters leads to a reduction in risk aversion and to clarify its effectiveness. If effective, it could become a new policy tool to support psychological recovery after disasters.