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Natural disasters, home damage, and the eroding locus of control

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  • Ha Trong Nguyen
  • Mitrou, Francis

Abstract

The catastrophic consequences of natural disasters on social and economic systems are extensively documented, yet their influence on individuals' sense of control over their life outcomes remains unexplored. This study pioneers an investigation into the causal effects of natural disaster-related home damage on the locus of control. Utilizing Australian longitudinal data, we implement an individual fixed effects instrumental variables approach leveraging time-varying, exogenous exposure to local natural disasters to address confounding factors. Our findings provide compelling evidence: natural disaster-induced home damage significantly diminishes individuals' perception of control, especially for those at the lower end of the locus of control distribution. The effect is disproportionately heightened for women, older individuals, wealthier households, those without prior insurance, urban or inland residents, and those in historically cyclone-free regions. This newfound understanding offers opportunities for developing targeted interventions and support mechanisms tailored to address the specific needs and vulnerabilities of individuals following natural disasters.

Suggested Citation

  • Ha Trong Nguyen & Mitrou, Francis, 2024. "Natural disasters, home damage, and the eroding locus of control," GLO Discussion Paper Series 1448, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1448
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    References listed on IDEAS

    as
    1. Deborah A. Cobb‐Clark & Stefanie Schurer, 2013. "Two Economists' Musings on the Stability of Locus of Control," Economic Journal, Royal Economic Society, vol. 0, pages 358-400, August.
    2. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2014. "What Do We Learn from the Weather? The New Climate-Economy Literature," Journal of Economic Literature, American Economic Association, vol. 52(3), pages 740-798, September.
    3. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Natural Disasters; Locus of Control; Housing; Australia;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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