Sirens of stress: Financial risk, time preferences, and post-traumatic stress disorder: Evidence from the Israel-Hamas Conflict

This research explores the relationship between post-traumatic stress disorder (PTSD), resulting from intense violence during the “Guardian of the Walls” operation in 2021, and economic decision-making. We surveyed civilians in Israel who experienced Gaza rocket attacks to understand the influence of PTSD on their financial decisions. The results revealed an interesting trend: PTSD sufferers showed a preference for immediate consumption over future savings and demonstrated a decrease in their willingness to take economic risks. These findings are significant because they offer insight into how trauma affects financial decisions, and crucial information for those helping PTSD sufferers—their relatives and therapists. It is essential for them to be aware of these tendencies to provide appropriate advice and assistance, helping the victims cope with their PTSD and make effective financial decisions in their daily lives.