Natural Disaster Expectations and Household Adaptation

Shifrah Aron-Dine

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: How do households form expectations about the risk of future natural disasters, and how do these expectations translate into household adaptation choices? A stylized model of natural disasters yields predictions that higher perceived risk should increase precautionary savings, protective investments, insurance take-up, and out-migration. Using survey data from Puerto Rico collected after Hurricane Maria, I find that households are quite pessimistic about future hurricane risk. However, adaptation responses are muted, and the relationship between disaster expectations and adaptation decisions is limited. These patterns raise important puzzles about household responses to natural disaster risk.

Keywords: 38 Economics (for-2020); 3801 Applied Economics (for-2020); Behavioral and Social Science (rcdc); Basic Behavioral and Social Science (rcdc); Climate-Related Exposures and Conditions (rcdc); Clinical Research (rcdc); 13 Climate Action (sdg) (search for similar items in EconPapers)
Date: 2026-05-01
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