Do Natural Disasters Affect Household Saving? Evidence From the August 2002 Flood in Germany

Michael Berlemann (), Erik Haustein (), Max Steinhardt () and Jascha Tutt ()
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Michael Berlemann: Helmut Schmidt University and Hamburg Institute of International Economics (HWWI)
Erik Haustein: Helmut Schmidt University and Hamburg Institute of International Economics (HWWI)
Jascha Tutt: Allianz Ltd.

Economics of Disasters and Climate Change, 2026, vol. 10, issue 1, No 2, 42 pages

Abstract: Abstract Recently, there is a growing interest in understanding how individuals adapt to changing climate conditions and climate-induced extreme weather events. An underexplored question is whether and how climate-related natural hazards affect household saving behavior. For this purpose, we exploit a natural experiment stemming from the European Flood of August 2002. Combining micro data with geo-coded flood maps allows us to analyze the causal impact of flood exposure on household savings within a difference-in-differences setting. We find that flood exposure depresses household saving behavior in the medium run. A likely explanation is moral hazard induced by massive government support for affected households.

Keywords: Natural disasters; Flood; Saving behavior; Natural experiment (search for similar items in EconPapers)
Date: 2026
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Working Paper: Do natural disasters affect household saving? Evidence from the August 2002 flood in Germany (2024)
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DOI: 10.1007/s41885-025-00182-8

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