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Saving Lives with Indexed Disaster Funds: Evidence from Mexico

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  • Alejandro del Valle

Abstract

Developing economies are not disproportionately exposed to natural disasters, but they experience significantly more deaths. Exploiting a discontinuity in the eligibility rules for Mexico's indexed disaster fund (Fonden), I show that the accelerated reconstruction of public infrastructure can significantly mitigate the mortality impacts of disasters. Fonden's impact is concentrated in areas with medical infrastructure and among conditions responsive to basic and freely available medical care. These findings suggest that Fonden operates by restoring access to health services. I also show that Fonden is cost-effective relative to other interventions and that its benefit–cost ratio is at least 3.2.

Suggested Citation

  • Alejandro del Valle, 2024. "Saving Lives with Indexed Disaster Funds: Evidence from Mexico," American Economic Journal: Economic Policy, American Economic Association, vol. 16(2), pages 442-479, May.
    • Handle: RePEc:aea:aejpol:v:16:y:2024:i:2:p:442-79
    DOI: 10.1257/pol.20220066
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    More about this item

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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