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Do Natural Disasters Stimulate Individual Saving? Evidence from a Natural Experiment in a Highly Developed Country

Michael Berlemann (), Max Steinhardt () and Jascha Tutt ()
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Jascha Tutt: Helmut Schmidt University, Hamburg

No 9026, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: While various empirical studies have found negative growth-effects of natural disasters, little is yet known about the microeconomic channels through which disasters might affect short- and especially long-term growth. This paper contributes to filling this gap in the literature by studying how natural disasters affect individual saving decisions. This study makes use of a natural experiment created by the European Flood of August 2002. Using micro data from the German Socio-Economic Panel that we combine with geographic flood data, we compare the savings behavior of affected and non-affected individuals by using a difference-in-differences approach. Our empirical results indicate that natural disasters depress individual saving decisions, which might be the consequence of a Samaritan's Dilemma.

Keywords: natural disasters; floods; growth; saving behavior; difference-in-differences approach (search for similar items in EconPapers)
JEL-codes: Q54 D14 O16 H84 (search for similar items in EconPapers)
Date: 2015-04
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Working Paper: Do Natural Disasters Stimulate Individual Saving? Evidence from a Natural Experiment in a Highly Developed Country (2015) Downloads
Working Paper: Do Natural Disasters Stimulate Individual Saving? Evidence from a Natural Experiment in a Highly Developed Country (2015) Downloads
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