Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025)

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The Impact of Natural Disasters on Risk Preference in Financial Investment

Authors
Ziling Ren1, *
1University of Macau, Macau, 999078, China
*Corresponding author. Email: rzl3484270159@hotmail.com
Corresponding Author
Ziling Ren
Available Online 5 May 2025.
DOI
10.2991/978-94-6463-702-1_42How to use a DOI?
Keywords
Natural Disasters; P2P Investment; OLS Regression; Borrower Maximum Rate
Abstract

This research examines the impact of natural disasters on risk preferences of financial investments, highlighting significant behavioral changes during such events. By utilizing a comprehensive dataset combining Peer-to-Peer (P2P) investment data in the United States from 2005 to 2008 with recorded natural disasters, we apply OLS regression technique to ascertain the shifts in financial behaviors, especially focusing on the Borrower Maximum Rate. The analysis reveals that natural disasters notably increase financial risk aversion, compelling investors to choose higher interest rates to minimize potential losses. Moreover, this research also explores the influence of socioeconomic factors such as race to risk preferences, showing that black borrowers generally face higher rates. These findings underscore the sensibility of financial markets to external shocks. The implications of this research are crucial for policymakers and financial institutions aiming to forge more resilient economic systems in the face of natural disasters.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
5 May 2025
ISBN
978-94-6463-702-1
ISSN
2352-5428
DOI
10.2991/978-94-6463-702-1_42How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Ziling Ren
PY  - 2025
DA  - 2025/05/05
TI  - The Impact of Natural Disasters on Risk Preference in Financial Investment
BT  - Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025)
PB  - Atlantis Press
SP  - 389
EP  - 396
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-702-1_42
DO  - 10.2991/978-94-6463-702-1_42
ID  - Ren2025
ER  -