Natural catastrophic events may have enormous negative effects on economic growth.
People affected by the disaster might be risk averse because of anxiety about the future
uncertainty of economic returns. The purpose of this empirical study is to highlight the
effect of natural disasters (specifically coastal cyclonic storm surges) on individuals' risk
preference and level of trust. This study also aims to disentangle risk propensity from
trust. It reveals that natural disasters can significantly reduce people's risk-taking
attitudes, whereas the catastrophic events have no influence on trusting behavior. The
study suggests that risk attitudes are significantly negatively correlated with trust.