We didn’t start the fire: Effects of a natural disaster on consumers’ financial distress

Anson Ho (), Kim Huynh, David Jacho-Chávez and Geneviève Vallée

Journal of Environmental Economics and Management, 2023, vol. 119, issue C

Abstract: Global climate change is increasing the frequency and severity of natural disasters. We use detailed consumer credit data to investigate the impact of the 2016 Fort McMurray Wildfire, the costliest wildfire disaster in Canadian history, on consumers’ financial stress. We focus on the arrears of insured mortgages because of their important implications for financial institutions and insurers’ business risk and relevant management practices. Our findings suggest that wildfires have caused more mortgage arrears in severely damaged areas, with both economic and statistical significance. For other areas with relatively minor damage, the increase in arrears is small and statistically insignificant.

Keywords: Causal inference; Climate change; Household finance; Synthetic control (search for similar items in EconPapers)
JEL-codes: D85 G01 G18 G21 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: We Didn’t Start the Fire: Effects of a Natural Disaster on Consumers’ Financial Distress (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:119:y:2023:i:c:s0095069623000086

DOI: 10.1016/j.jeem.2023.102790

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