The vagaries of valuation: Post-traumatic growth and psychological responses to gains and losses

Abstract

The experiences of war and trauma have been shown to have many implications for the behavior and attitudes of individuals, including economic and social preferences. It has been argued that this may in part be the result of a process called Post Traumatic Growth (PTG), where individuals exposed to traumatic events experience growth in a number of domains, thereby shifting preferences. However, few studies have actually tested this supposition with field data. I argue that in populations that have experienced trauma such as armed conflict, individuals who experience PTG will display a reduced tendency towards loss-aversion, which individuals in threatening conditions otherwise display. To test my hypotheses, I conduct a survey with over 2000 refugees from the ongoing conflict in Syria, living in the Midyat refugee camp in Mardin, near the Turkish-Syrian border. In addition to reporting individual level trauma, the respondents also complete a hypothetical valuation task. I show that in this conflict-exposed sample, individuals not experiencing PTG displayed stronger responses to losses than to gains. However, individuals with high PTG showed the inverse relationship, with stronger responses to gains than to losses. This has implications for post conflict societies and other contexts where people may have experienced high levels of trauma.