Individual Updating of Subjective Probability of Homicide Victimization: a "Natural Experiment'' on Risk Communication

Abstract

We investigate the dynamics of the update of subjective homicide victimization risk after an informational shock by developing two econometric models able to accommodate both optimal decisions of changing prior expectations which enable us to rationalize skeptical Bayesian agents with their disregard to new information. We apply our models to a unique household data (N = 4,030) that consists of socioeconomic and victimization expectation variables in Brazil, coupled with an informational ``natural experiment'' brought by the sample design methodology, which randomized interviewers to interviewees. The higher priors about their own subjective homicide victimization risk are set, the more likely individuals are to change their initial perceptions. In case of an update, we find that elders and females are more reluctant to change priors and choose the new response level. In addition, even though the respondents' level of education is not significant, the interviewers' level of education has a key role in changing and updating decisions. The results show that our econometric approach fits reasonable well the available empirical evidence, stressing the salient role heterogeneity represented by individual characteristics of interviewees and interviewers have on belief updating and lack of it, say, skepticism. Furthermore, we can rationalize skeptics through an informational quality/credibility argument.