Abstract

Will disasters promote consumption or inhibit consumption? The existing literature has a sharp opposition to this. This paper adopts the two-pronged method of macro county data and micro random experiment, and uses the impact variable of Luding 6.8 earthquake in 2022 to systematically explore the impact of earthquake on consumption and the psychological mechanism behind it. On the macro level, using the panel data of 16 counties in western China from 2010 to 2024, and using the two-way fixed-effect difference-in-difference model, it is found that the total retail sales of social consumer goods in the earthquake-stricken counties are about 11 % lower than those in the non- earthquake-stricken counties (Bootstrap p = 0.035), and the effect is most obvious under the intensity below VI in the earthquake-stricken counties (-8.8 %, p = 0.001). From the microscopic point of view, a randomized controlled experiment (the experimental group looked at the seismic image, the control group looked at the neutral video) was used to measure the loss aversion, time discount, and state anxiety of 56 subjects. The results showed that the seismic information shock significantly increased the loss aversion score (the experimental group 3.20 vs the control group 3.09, p = 0.049) and the state anxiety level (p = 0.027), but had no significant effect on the time discount preference. This paper argues that the earthquake stimulates precautionary savings motivation by enhancing loss aversion and immediate anxiety, thereby inhibiting consumption, while the effect of timely pleasure or increased risk appetite is not dominant in this scenario. This shows that the traditional view of “disaster stimulating consumption” is wrong and provides a new insight into the psychological mechanism of post-disaster economic recovery policies.

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