Benefit in the wake of disaster: Long-run effects of earthquakes on welfare in rural Indonesia

Jérémie Gignoux and Marta Menéndez
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Marta Menéndez: LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: We examine the long-term effects on individual economic outcomes of a set of earthquakes – numerous, large, but mostly not extreme – that occurred in rural Indonesia since 1985. Using longitudinal individual-level data from large-scale household surveys, together with precise measures of local ground tremors obtained from a US Geological Survey database, we identify the effects of earthquakes, exploiting the quasi-random spatial and temporal nature of their distribution. Affected individuals experience short-term economic losses but recover in the medium-run (after two to five years), and even exhibit income and welfare gains in the long term (six to twelve years). The stocks of productive assets, notably in farms, get reconstituted and public infrastructures are improved, seemingly partly through external aid, allowing productivity to recover. These findings tend to discount the presence of poverty traps, and exhibit the potential long-term benefits from well-designed post-disaster interventions in context where disasters primarily affect physical assets.

Keywords: aid and reconstruction; rural Indonesia; long-term effects; welfare; earthquakes; Natural disasters; aide et reconstruction; effets à long terme; bien-être; Catastrophes naturelles; tremblements de terre; Indonésie rurale (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-dev
Note: View the original document on HAL open archive server: https://hal.science/hal-01617385v1
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Published in Journal of Development Economics, 2016, 118, pp.26-44. ⟨10.1016/j.jdeveco.2015.08.004⟩

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Related works:
Journal Article: Benefit in the wake of disaster: Long-run effects of earthquakes on welfare in rural Indonesia (2016)
Working Paper: Benefit in the wake of disaster: Long-run effects of earthquakes on welfare in rural Indonesia (2014)
Working Paper: Benefit in the wake of disaster: Long-run effects of earthquakes on welfare in rural Indonesia (2014)
Working Paper: Benefit in the wake of disaster: Long-run effects of earthquakes on welfare in rural Indonesia (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01617385

DOI: 10.1016/j.jdeveco.2015.08.004

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