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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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 12 years). The stocks of productive assets, notably in farms, get reconstituted and public infrastructures are reconstructed with some improvements, 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 post-disaster interventions in context where disasters primarily affect physical assets.

Keywords: Natural disasters; Earthquakes; Rural Indonesia; Long-term effects; Welfare; Aid and reconstruction (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-agr, nep-dev and nep-sea
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01064506v2
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Citations: View citations in EconPapers (5)

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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 (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)
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