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Observing traumatic events: Indirect effects of flood shocks on well-being and preferences

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  • Stein, Wiebke
  • Weisser, Reinhard A.

Abstract

This paper investigates how witnessing adverse weather events affects individuals' perceptions and consequently their personal well-being. To identify potential exposure to a weather shock, we link satellite-based data on flooding to an extensive household panel survey from rural Southeast Asia. We find that mere proximity to a potentially adverse shock, even without reporting any actual experience of the shock, can be sufficient to reduce individual well-being levels. This effect is not only restricted to the present but can also impinge on expected future well-being dynamics. Such a persistent distortionary effect from witnessing a weather shock may also have politico-economic repercussions by, for instance, altering support for redistributive policies.

Suggested Citation

  • Stein, Wiebke & Weisser, Reinhard A., 2020. "Observing traumatic events: Indirect effects of flood shocks on well-being and preferences," Hannover Economic Papers (HEP) dp-678, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    • Handle: RePEc:han:dpaper:dp-678
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Environmental shocks; Perception; Subjective well-being; GIS data; MODIS flood mapping;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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