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Related Experiment Video

Updated: Jul 15, 2026

Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods

Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods

Published on: September 19, 2012

Labor Supply, Risk Aversion, and Conflict Uncertainty.

Kiet Tuan Duong¹, Nam T Vu²

¹University of York, York, UK.

Risk Analysis : an Official Publication of the Society for Risk Analysis

|July 14, 2026

Summary

Conflict uncertainty significantly reduces people's willingness to work. Increased risk aversion due to conflict proximity leads to a decrease in labor supply, reframing the traditional labor-leisure choice.

Keywords:

conflict uncertainty health labor safety and environmental (HS&E) risks

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Published on: September 16, 2015

Area of Science:

Economics
Behavioral Economics
Conflict Studies

Background:

The traditional labor-leisure choice assumes stable conditions.
Conflict and uncertainty can fundamentally alter individual decision-making regarding work.
Understanding how conflict impacts economic behavior is crucial for policy and stability.

Purpose of the Study:

To investigate the impact of conflict uncertainty on labor supply decisions.
To analyze how perceived risk aversion changes in response to conflict.
To re-frame the labor-leisure choice model under conditions of conflict.

Main Methods:

Utilizing proximity to the Ukrainian border as an exogenous proxy for conflict uncertainty.
Employing econometric analysis to measure the effect of conflict uncertainty on labor supply.
Assessing changes in perceived risk aversion linked to conflict proximity.

Main Results:

Increased conflict uncertainty is demonstrably linked to a negative effect on individuals' willingness to work.
Proximity to conflict zones correlates with a measurable decrease in labor supply.
The observed decrease in labor supply coincides with heightened perceived risk aversion.

Conclusions:

Conflict uncertainty significantly alters the labor-leisure calculus, making work appear riskier.
Individuals reduce labor supply when faced with conflict-related uncertainty and increased risk aversion.
The findings highlight the profound economic consequences of geopolitical instability on individual behavior.