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

Abstract

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.

Keywords

financial decision-making PTSD risk preference terrorism time preference

Introduction

Violent war events can cause distressing psychological consequences. Populations residing in areas affected by war violence, especially victims and witnesses, have a high risk of suffering different emotional disorders, including Post-Traumatic Stress Disorder (PTSD), major depression, helplessness, fear, and anxiety. The long-term consequences of mass violence stem primarily from the psychological trauma it causes (MacDermid Wadsworth, 2010). The concept of mental trauma refers to mental harm caused by an outside event, which is perceived by the individual as threatening one’s essential needs, such as self-confidence, safety, social and economic status, or physical well-being. Therefore, events of military conflict and stress could be perceived as traumatic events and cause post-trauma symptoms (Blevins et al., 2015; Paryente, 2021). The consequences of such emotional distress are disturbing on their own but often go beyond the direct effects on mental health. Clinical levels of trauma, fear, depression, and anxiety cause emotional exhaustion, influence social functioning and hinder the ability to perform different tasks (Bayer, 2023; Mollica et al., 1987; Vinck et al., 2007).

In this way, the psychological consequences of violence can also affect the process of financial decision-making, a topic that this article seeks to examine. In this research, we deal with the financial behavior of Israeli civilians who suffer from post-trauma characteristics as a result of stressful situations experienced during the Israeli army’s “Guardian of the Walls” operation.¹ In May 2021, during the 12-day conflict between Israel and the Hamas terror organization in Gaza, Hamas and other terror organizations fired rockets and mortar bombs mostly toward the populated areas of Israel that are near the Gaza Strip border (“The Gaza Envelope”), the coastal Israeli cities, Jerusalem, and Be’er Sheva. In sum, Hamas and other armed organizations fired 4360 rockets into Israel, with 3573 rockets falling in Israel’s territory and the rest in the Gaza Strip and the Mediterranean. The Iron Dome missile defense system intercepted approximately 90% of the launches that were supposed to hit populated areas. Eleven people were killed as a direct result of the rocket fire, with one soldier killed as a result of an anti-tank missile fire. In addition, 357 people were injured. Damage was also caused to residential buildings, several educational institutions, factories, and agricultural buildings (The Meir Amit Intelligence and Terrorism Information Center, 2022).

Our focus on PTSD is guided by its specific classification in the DSM-5, particularly in comparison to related mental disorders. While exposure to war or terror can potentially lead to conditions such as depression or other psychological concerns, not all these conditions can be directly attributed to the traumatic incident. Conversely, post-traumatic stress disorder is distinctly defined in relation to such events in the DSM-5. Recognizing our limitations in exploring all mental health implications and their root causes, we decided to focus on a disorder intrinsically linked to traumatic events.

According to the DSM-5, PTSD symptoms are categorized into four clusters: re-experiencing, avoidance, negative thoughts and mood, and arousal. PTSD frequently accompanies persistent negative emotional state (fear, horror, anger, guilt, or shame), diminished interest or participation in significant activities, and persistent inability to experience positive emotions (DSM-5). This study focuses on two fundamental aspects of individual financial decisions: the preference for immediate versus future consumption (time preference) and the inclination toward either uncertain, riskier choices or safer, more predictable ones (risk preference). We propose that particular emotional states can interfere with the judgment and preferences of those suffering from PTSD. It stands to reason that individuals grappling with such strong emotions may have difficulty managing uncertainties and framing long-term choices. Consequently, their attitudes toward savings and financial risk might diverge from those without PTSD.

Time preference

In economics, time preference expresses the value attributed to an asset or a benefit as well as an action or a feeling at a given time compared to the perception of its value at a later period. Time preference is defined relatively, and a person who tends to prefer the present will focus on preserving the present or short-term benefit relative to the average person. A person with a high preference for the future will appreciate a future benefit more than an average person. Economic theory holds that individuals naturally tend to favor current consumption and therefore require compensation to delay consumption. In the case of money, the compensation for deferred consumption is interest. Overcoming this natural tendency requires restraint and self-control. The latter are cognitive abilities that might be affected by an individual’s mental state of health and the emergence of psychiatric disorders, such as PTSD.

The discount rate is the basis for capitalizing future cash flows and translating them into current values. The subjective discount rate (SDR) is the rate at which individuals trade between present values and future values, namely, the rate that a person requires for postponing consumption from the present to the future. This rate varies from person to person and depends, among other things, on the individual’s willingness to wait and other personality traits. Generally, a person who prefers current consumption over future consumption will have a higher SDR than a person who prefers future consumption over the present.

Many studies have focused on monetary questions and found that the SDR may vary according to the amount of money, the delay period, and the direction of trade (see, e.g. Benzion et al., 1989; Chapman and Elstein, 1995; Frederick et al., 2002; Myerson et al., 2003; Prelec, 2004; Thaler, 1981). Further studies have found that individual discounting coefficients vary not only based on their income, economic situation, or pure cost-benefit analysis but also according to personal and demographic characteristics such as level of education, gender, marital status, cognitive abilities, psychological traits (e.g. Grable and Joo, 2004), age (Green and Myerson, 1994; Read and Read, 2004; Sozou and Seymour, 2003), profession (Black, 1984; Krumer et al., 2011), health condition and cultural contexts (Du et al., 2002).

Chao et al. (2009) determined that an individual’s physical health and their views on survival affect their subjective discount rate (SDR), noting that extremely healthy or unwell individuals tend to have higher SDRs when compared to other participants. Carstensen et al. (1999) presented the concept of socio-emotional selectivity, positing that individuals who perceive a longer lifespan are oriented toward the future, while those sensing a shorter lifespan are more centered on the present. Milenkova et al. (2011) found that patients with Parkinson’s disease exhibit unique monetary time preferences, particularly after consuming dopamine.

Risk preference

Another important economic variable that may affect an individual’s financial decisions is risk preference, the tendency to prefer or avoid risk. Beyond an individual’s risk preference, which is a personality trait, decisions made in risky contexts are also influenced by how the individual perceives and evaluates subjective risk (Brockhaus, 1980; Rabin, 2013; Riley and Chow, 1992; Shavit et al., 2013; Tochkov, 2009). Risk-averse individuals find it more difficult to accept uncertainty regarding future income. In an experiment that used both monetary lotteries with various levels of risk (as an index of risk aversion) and a questionnaire on delayed payment contexts, Anderhub and Güth (2001) found a positive correlation between risk aversion and SDR. Researchers have also found that age is correlated with risk preference. Deakin et al. (2004) examined the risk preferences and decision-making of individuals using a laboratory experiment that included a gambling task. For each gamble, participants received a certain number of points that they could allocate between two options, one safe and one risky. The researchers found that older people displayed less risky behavior and risked significantly fewer points than younger people. Dohmen et al. (2011) also examined risk preference as a function of age. Participants completed a questionnaire that asked them to choose between lotteries at varying risk levels. The choice of lotteries was weighted according to an index of the intensity of participants’ risk preferences. The study found that age has an effect on risk preferences and that the tendency to take risks decreases throughout the life cycle.

Mental state and time and risk preferences

Only a few studies have examined aspects of time preferences, risk preferences, and mental health (e.g. Abatayo and Lynham, 2020; Kassas et al., 2022; Lahav et al., 2019). Ifcher and Zarghamee (2011) examined the influence of joy, a positive emotion, on people’s time preferences. In their study, the average current value for a future sum given by participants who watched a video previously shown to make viewers happy was a significantly higher average current value given by a control group that had not watched the video. Loewenstein et al. (2001) maintained that decisions related to risk preference are strongly and significantly affected by an individual’s emotional state, arguing that feelings of fear affect the decision-making process in risk situations, making it different from how decisions are analyzed using accepted quantitative models, such as the utility expectancy model. Raghunathan and Pham (1999) found that affective states of the same valence may have distinct influences on decision processes. In the experiments they performed, they found that in gambling decisions, as well as in job-selection decisions, sad individuals are biased in favor of high-risk/high-reward options, whereas anxious individuals are biased in favor of low-risk/low-reward options. Bayer et al. (2019) found that the degree of clinical depression exhibited by research participants influenced their economic choices, time preferences, economic behaviors, and risk inclinations. Furthermore, the study delineated a marked disparity in numerous dimensions of economic decision-making between those with varying intensities of clinical depression and their healthy counterparts.

Studies have found an association between post-traumatic stress disorder (PTSD) and health-risk behaviors, particularly in studies conducted among military veterans (Buckley et al., 2004; Widome et al., 2011). The literature suggests that individuals with PTSD tend to exhibit impulsive behavior, as indicated by Kotler et al. (2001) and Tull et al. (2016), which may affect their economic preferences.

Emotional avoidance is a common reaction to trauma. Avoidance refers to any action designed to prevent the occurrence of an uncomfortable emotion such as fear, sadness, or shame. Emotional avoidance is part of the avoidance cluster of post-traumatic stress disorder (PTSD) symptoms, serving as a way for people with PTSD to escape painful or difficult emotions. Many studies link PTSD to avoidant behavior (Shalev, 1992; Solomon and Canino, 1990). We believe this behavior might influence economic decision-making, especially those that involve a risk of losses.

Several studies have investigated the impact of violence, natural disasters, and other negative events and personal shocks on individual time preferences and risk attitudes. These studies suggest that individuals’ time preferences and risk attitudes are linked to these events, but the direction of the effect is not consistent (Abatayo and Lynham, 2020; Hanaoka et al., 2018; Jakiela and Ozier, 2019; Kahsay and Osberghaus, 2018; Motonishi, 2017; Petrolia et al., 2013; Rice and Robone, 2022; Sagemüller and Mußhoff, 2020).

Purpose of the study and research hypotheses

Violent clashes, wars, and terrorist attacks affecting the civilian population have become widespread worldwide. As mentioned, emotional exhaustion can hinder the ability to perform different tasks (Klein et al., 2020; Mollica et al., 1987; Vinck et al., 2007). In light of the aforementioned characteristics of the mental and cognitive state of individuals suffering from PTSD, this study examined the hypothesis that there is a significant link between PTSD and how complex economic decisions are made. The study examined the relationship between individuals’ level of PTSD symptoms and their time and risk preferences.

Our hypothesis regarding time preference was that people with PTSD symptoms would tend to have a higher SDR (stronger present preference) and that these individuals would require significantly higher average compensation than healthy individuals with otherwise similar characteristics who are asked to postpone consumption. This hypothesis was based on the assumption that individuals with PTSD symptoms would tend to be concerned with improving the present, would have difficulty thinking about future consumption, and would not consider the long term. It is possible that the tendency toward impulsive behavior, as described in the literature (Kotler et al., 2001; Tull et al., 2016), may also contribute to a preference for the present over thinking about the future.

Our hypothesis regarding risk preference is that individuals with PTSD symptoms tend to take fewer risks than healthy people. This hypothesis was based on the assumption that individuals who have PTSD symptoms tend to be anxious about the future and tend not to take risks because they underestimate their chances of benefiting from the risky option. Therefore, they prefer certain options. As mentioned, the available literature on PTSD indicates that individuals afflicted with this condition tend to impulsivity (Kotler et al., 2001; Tull et al., 2016) and in some cases health risky behavior (Buckley et al., 2004; Widome et al., 2011); on the other hand, many studies link PTSD to avoidant behavior (Shalev, 1992; Solomon and Canino, 1990). Hence, any expectations on this matter may not be definitive.

Methodology

Questionnaires

This study was conducted as part of a broader study dealing with the formation of post-trauma among the civilian population exposed to rocket attacks. The study was conducted using a structured, between-subject questionnaire. The data was collected through an online survey that was distributed across different social media platforms. This survey was made accessible to individuals from various regions of Israel. This method was chosen to capture a wide range of respondents: from those who experienced multiple missile attacks to those who have not encountered any, and all levels of exposure in between. The goal was to analyze the disparities across varying degrees of exposure. As part of the broader research, participants completed an accepted questionnaire for evaluating and classifying the level of post-traumatic characteristics (PCL-5, DSM-5²). To assess the implications on financial decision-making, the study integrated questions designed to estimate the time and risk preferences of the respondents (see Supplemental Appendix).

The PCL-5 questionnaire is a very common tool for measuring the severity of PTSD. The PCL-5 is a 20-item self-report measure that assesses the 20 DSM-5 symptoms of PTSD (Blevins et al., 2015). It includes 20 multiple-choice, self-reporting questions with high internal consistency reliability, α = 0.96 (Bovin et al., 2016; Wortmann et al., 2016). Respondents are asked to rate how bothered they have been by each of the 20 items in the past month on a 5-point Likert scale ranging from 0 to 4. Items are summed to provide a total severity score (range = 0–80).

We referred to the PCL-5 as determining a provisional diagnosis in two ways, as is customary in previous studies (Bovin et al., 2016; Wortmann et al., 2016). The first way is treating each item rated as 2 = “Moderately” or higher as an endorsed symptom. This is following the DSM-5 diagnostic rule which requires at least: 1 Criterion B item (questions 1–5), 1 Criterion C item (questions 6–7), 2 Criterion D items (questions 8–14), and 2 Criterion E items (questions 15–20). The dichotomous variable PTSD Binary received the value 1 for participants who met the diagnostic rule and 0 otherwise. The second way is summing all 20 items (range 0–80). The variable PTSD Index represents the score test. The higher the score, the stronger the symptoms. For the study, participants with no PTSD symptoms were defined as “healthy,” regardless of any background physical disease.

In addition to the PCL-5 questionnaire for evaluating and classifying the level of PTSD symptoms, participants answered questions dealing with financial time and risk preferences. The method we used is an accepted method of research in this field (e.g. Lahav et al., 2011).

To estimate the time preferences, the SDR of individuals was estimated. For this purpose, the questionnaire asked participants to specify the minimum amount they would require before agreeing to delay receiving a sum of money they are supposed to receive in the present. The discount rate was calculated based on the required amount and the deferred amount. The SDR of individuals was estimated for 3000 NIS (approximately 900 USD) for a postponement of 1 year.

The individual’s risk preference was estimated using the following lottery question:

Imagine you are offered a ticket for a lottery with 10 participants (so you have a 1:10 chance of winning). The prize in the lottery is NIS 10,000³ in cash. What is the maximum amount you would be willing to pay for such a lottery ticket? I would be willing to pay no more than NIS ___ to purchase the lottery ticket.

A higher price offered for the lottery ticket indicates a tendency toward riskier economic choices.

Additionally, participants answered demographic questions (gender, age, income, education, and number of children) and questions dealing with their experience during the operation “Guardian of the Walls.”

Research population

The questionnaire was completed by 395 participants on social media networks. Thirteen observations were excluded from the sample because of missing information or irrelevant answers, and the final sample included 382 participants (78.8% female, mean age 38.72). The participants were from different parts of Israel, most of whom were from areas that suffered from the intensity of rocket attacks during the “Guardian of the Walls” operation.

Sixty-two of the participants suffered from significant PTSD according to the criteria outlined above (Method 1).⁴ The distribution of the score of the participants in the PCL-5 questionnaire can be seen in Figure 1.

Figure 1.

Distribution of results on the PCL-5 test.

Results

Characteristics of participants

Table 1 presents descriptive statistics of our 382 participants, divided into two conditions by the variable PTSD Binary (dichotomous variable indicating suffering from post-trauma). The third-to-last row shows that the mean willingness to pay for the lottery ticket was lower among those who suffered from PTSD symptoms (86.93) than among healthy individuals (173.70). The difference is significant (t = −2.990, p = 0.029). In other words, the risk aversion of subjects with PTSD is higher than that of healthy subjects. The second-to-last row reveals that the subjective discounting rate was higher among those who suffered from PTSD symptoms (1.49) than among healthy individuals (0.99). The difference is significant (t = 1.736, p = 0.006). These findings show a stronger present preference among subjects with PTSD compared to healthy.

Table 1.

Subjects’ descriptive statistics (mean and standard deviation).

	PTSD	Healthy	T test
Age	34.23 (12.36)	39.81 (13.98)	T = −2.900
			p = 0.004
Male	0.16 (0.37)	0.22 (0.41)	T = −0.995
			p = 0.321
Income	4.88 (3.15)	6.27 (2.97)	T = −2.914
			p = 0.005
Education	13.83 (3.11)	15.61 (2.95)	T = −4.274
			p < 0.001
Children	1.13 (1.45)	2.01 (1.85)	T = −3.525
			p < 0.001
Risk	86.93 (116.20)	173.70 (301.20)	T = −2.199
			p = 0.029
SDR	1.98 (3.90)	1.03 (2.02)	T = 2.783
			p = 0.006
N	62	320

Standard deviations appear in parentheses.

Table 1 also shows that there are significant differences between the two groups in terms of age, income, education, and number of children. Therefore, to measure the effect of PTSD on risk preference and time preference while controlling for these explanatory variables, we conducted hierarchical multiple linear regressions. The results are reported in the following two sections, “PTSD and risk preference” and “PTSD and time preference (SDR).”

PTSD and risk preference

The tendency to take economic risks was estimated using a lottery pricing question. To examine the differences between healthy individuals and those who suffer from PTSD symptoms and estimate the correlation between PTSD and risk preferences, additional control variables were added to the models. The presumption is that these variables are correlated with an individual’s risk preferences. A hierarchical multiple linear regression with the willingness to pay for lottery tickets was used as the dependent variable. The PTSD explanatory variable differs between regressions 1 and 3 and regressions 4–6. The first three regressions include the variable PTSD Binary, a dichotomous variable indicating suffering from post-trauma. Regressions 4 to 6 include the PTSD Index variable and the participant’s test score. In the first stage, we included only the PTSD explanatory variable. In the second stage, we added the dichotomous gender variable, Male, which receives the value 1 for male subjects and 0 for female subjects. In the third stage, we added the control variables of income (11 categories), age (we also included the squared variable to reflect a U-shaped relationship between risk preference and age (e.g. Chao et al., 2009)), education (years), and children (number of children). Table 2 presents the results of the regressions.

Table 2.

Regression analysis—risk preferences.

	1	2	3	4	5	6
Constant	172.294*** (16.405)	158.488*** (18.320)	340.277*** (132.140)	187.757*** (20.539)	173.287*** (22.167)	340.546* (132.407)
PTSD Binary	−88.451* (41.539)	−84.285* (41.499)	−90.624* (43.396)
PTSD Index				−2.222* (1.060)	−2.141* (1.058)	−2.267* (1.133)
Male		61.459 (36.708)	57.301 (37.399)		62.561 (36.682)	58.483 (37.392)
Income			0.822 (5.531)			0.566 (5.545)
Age			−8.982 (6.581)			−7.727 (6.633)
Age²			0.099 (0.070)			0.086 (0.071)
Education			−0.335 (6.069)			−0.824 (6.124)
Children			−0.024 (10.875)			−1.345 (10.969)
R² (%)	1.4	2.2	3.0	1.3	2.2	2.9
Change in R² (%)		0.8	0.8		0.9	0.7
F Change		2.803	0.503		2.909	0.438
N	382	382	382	382	382	382

Dependent variable: risk preferences (willingness to pay for a lottery ticket). The results appearing in the table represent the unstandardized coefficients; SEs appear in parentheses.

p < 0.05. **p < 0.01. ***p < 0.001.

The coefficients of the variables PTSD Binary and PTSD Index are negative and significant, implying that individuals suffering from post-traumatic symptoms are more risk averse. Their willingness to pay for the lottery ticket was lower by 84–90 NIS (in regressions 1–3) compared to healthy subjects. Each point in the subject’s PCL-5 test score reduces the willingness to pay by 2.1–2.3 NIS (regressions 4–6). We find that men are less risk-averse than women. Men’s willingness to pay was higher by 57–63 NIS (regressions 2–3, 5–6). However, the gender coefficient was not statistically significant. Adding other control variables in Stage 3 (regressions 3 and 6) did not contribute to the proportion of the variation in the dependent variable that is predictable.

PTSD and time preference (SDR)

To estimate the effect of PTSD symptoms on the subjective discount rate (SDR), identical hierarchical multiple linear regressions to the regressions in section “PTSD and risk preference” were conducted, with the individual’s SDR as the dependent variable. The model estimates the SDR appropriate for the research population and characterizes its behavior according to the amount that participants requested for the postponement of the amount of money offered. The SDR was calculated as a simple interest rate as follows (postponement of 3000 NIS, 1 year):

S D R_{(3, 000, Y e a r)} = \frac{F V}{P V} - 1

FV represents the future value, the amount the participant asked to agree to receive 1 year from today instead of 3000 NIS today. PV = Present value, 3000 NIS. Table 3 presents the results of the model.

Table 3.

Regression analysis—time preferences.

Stage	1	2	3	4	5	6
Constant	1.060*** (0.154)	0.999*** (0.173)	3.189*** (1.232)	0.578*** (0.188)	0.510** (0.203)	2.665** (1.207)
PTSD Binary	1.047*** (0.390)	1.065*** (0.931)	0.745* (0.405)
PTSD Index				0.049*** (0.010)	0.049*** (0.010)	0.044*** (0.010)
Male		0.272 (0.346)	0.184 (0.349)		0.293 (0.337)	0.215 (0.341)
Income			−0.019 (0.052)			−0.006 (0.051)
Age			−0.021 (0.061)			−0.050 (0.060)
Age²			0.000 (0.001)			0.001 (0.001)
Education			−0.101 (0.057)			−0.069 (0.056)
Children			−0.128 (0.101)			−0.080 (0.100)
R² (%)	2.2	2.4	5.3	7.3	7.5	9.3
Change in R² (%)		0.2	2.9		0.2	1.8
F Change		0.618	1.953		0.760	1.248
N	382	382	382	382	382	382

Dependent variable: Time preferences (SDR). The results appearing in the table represent the unstandardized coefficients; SEs appear in parentheses.

p < 0.05. **p < 0.01. ***p < 0.001.

The positive and significant coefficients of the variable PTSD Binary in regressions 1–3 show that individuals suffering from post-traumatic symptoms are characterized by higher discount rates, that is, they value future amounts less than healthy people. The positive and significant coefficients of the PTSD Index in regressions 4–6 show that participant PCL-5 scores correlate with their SDR. Individuals with a higher score for PTSD are characterized by higher discount rates. In other words, the higher the level of PTSD symptoms, the more difficult it is for individuals to delay future amounts of money, and they demand higher compensation for agreement to delay (stronger present preference). The analysis shows that additional control variables did not correlate with the dependent variable (except for Education in regression 3).⁵

Discussion

The classical economic literature holds that individuals have stable, consistent economic preferences. The findings of our study suggest that varying mental states may lead to changes in an individual’s preferences and economic conduct. The results suggest that individuals with PTSD characteristics will be less likely to save, will prefer current consumption, and tend toward safer economic choices.

These findings are interesting, while previous studies have suggested a link between PTSD and impulsive behavior, our research indicates that individuals with PTSD may exhibit less risky economic behavior. It is possible that this finding may be due to the avoidance symptoms associated with PTSD (Shalev, 1992; Solomon and Canino, 1990), where individuals may be more focused on avoiding potentially negative outcomes and thus exhibit more cautious behavior. Individuals with PTSD may experience heightened anxiety and fear, which can lead to a more cautious approach to decision-making.

Our research has shown that individuals with PTSD symptoms tend to have a higher subjective discount rate and are more likely to choose immediate gratification over long-term benefits. One possible explanation for this link is that PTSD can alter an individual’s perception of time. Trauma can make the future feel uncertain and unpredictable, leading to a focus on the present moment. Additionally, the hyperarousal and intrusive thoughts associated with PTSD can make it difficult to plan for the future or consider the long-term consequences of one’s actions.

Behavioral biases influenced by PTSD can hinder an individual’s financial decisions both in the short and long run. Such biases can lead to significant economic consequences, especially when making financial choices. For instance, due to their risk-averse nature, those with PTSD might shy away from investing in stocks or assets that offer potentially high returns, thereby diminishing their overall portfolio growth over time. Additionally, these biases can manifest in daily expenditure patterns, with some PTSD-affected individuals possibly spending excessively. A tendency to cling to cash or easily liquidated assets might also be prevalent, causing them to miss out on lucrative investment opportunities. This can impact their financial stability, retirement plans, and overall wealth accumulation. Recognizing these factors is crucial not just for the individuals affected but also for financial advisors, therapists, and policymakers to provide appropriate guidance and support.

The current study is preliminary, and like many studies, it has several limitations. First, the study is not a within-subject study that compares the behavior of the same individual in both a healthy state and when suffering from PTSD but rather a between-subject analysis that did not examine the initial level of the individuals’ financial conduct. Furthermore, rather than conducting an in-depth clinical diagnosis, the mental states of respondents were estimated (with the PCL-5 questionnaire). Therefore, further research is needed to better understand the underlying mechanisms of this relationship and to develop interventions that can help individuals with PTSD make better economic decisions. Understanding the factors that influence the link between PTSD and economic preferences is important for developing effective treatments.

As mentioned, the impact of individual biases on economic decision-making can have a significant, sometimes devastating, effect on individuals with PTSD. Therefore, it is recommended that the results of this study be considered by care providers in hospitals and other clinical or rehabilitation settings that provide mental health care and monitoring. It would be appropriate for individuals with PTSD to be aware of this bias and engage in consultation with others regarding significant economic decisions. Future studies can be conducted on a broader, larger basis, examining other aspects of economic decision-making that are affected by PTSD.

The implications of our results on time preference could extend to considerations of health-related behaviors. The impulsiveness discounting model proposed by Ainslie (1975) suggests that higher delay-discounting rates are associated with increased impulsiveness. Many health behaviors like cancer control behaviors, such as quitting smoking, mammography screening, vaccination, and maintaining a healthy diet, reflect a balance between immediate costs and future benefits. How people value the present versus the future, might influence these decisions. Earlier studies identified a connection between time and risk preferences and health-associated behaviors. Tsutsui et al. (2010) posited that a bounded rationality model aptly describes vaccination behavior; individuals weigh the pros and cons of vaccination through the lens of risk aversion and time preference. Separate research highlights the link between a present-focused outlook and drug use (Kirby et al., 1999), smoking (Baker et al., 2003), and excessive alcohol consumption (Vuchinich and Simpson, 1998). Our findings show that individuals with PTSD exhibit distinct behavioral tendencies: They may eschew financial risks and display a predilection for immediate rewards over delayed benefits. Given that PTSD is correlated with time preference and decision-making processes, this pattern could steer them toward prioritizing short-term safety and neglecting broader health strategies. Such insights underscore the importance of further explorations into how trauma influences health behaviors and the crafting of specialized interventions for PTSD sufferers.

Supplemental Material

sj-sav-1-hpq-10.1177_13591053231207693 – Supplemental material for Sirens of stress: Financial risk, time preferences, and post-traumatic stress disorder: Evidence from the Israel-Hamas Conflict

Supplemental material, sj-sav-1-hpq-10.1177_13591053231207693 for Sirens of stress: Financial risk, time preferences, and post-traumatic stress disorder: Evidence from the Israel-Hamas Conflict by Ya’akov M Bayer and Zeev Shtudiner in Journal of Health Psychology

Footnotes

Acknowledgements

The authors extend their heartfelt gratitude to the participants who took the time to complete the research questionnaire. A significant number of these participants hail from the areas surrounding the Gaza Strip. These individuals have endured devastating acts of merciless and cruel violence against their family members and friends within their communities by terrorists from the Hamas organization, particularly on October 7, 2023. You are in our thoughts, and our most fervent prayers and deepest sympathies are unreservedly with you. We extend our heartfelt wishes for a full and speedy recovery to those who have been injured. We fervently hope for the immediate and safe return of those who are being held hostage. Additionally, we pray for those who have been tragically murdered.

Data sharing statement

The current article is accompanied by the relevant raw data generated during and/or analysed during the study, including files detailing the analyses and either the complete database or other relevant raw data. These files are available in the Figshare repository and accessible as Supplemental Material via the Sage Journals platform. Ethics approval, participant permissions, and all other relevant approvals were granted for this data sharing.

Declaration of conflicting interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

Ethics approval

The Ethics Committee of Ben-Gurion University of the Negev approved this research (approval number 31-2021).

Informed consent

All study participants have digitally confirmed their agreement to an informed consent form in accordance with the Ethics Committee’s guidelines.

ORCID iD

Ya’akov M Bayer

Notes

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