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The impact of natural and manmade disasters on household welfare

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Yasuyuki Sawada

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Abstract

In this article, we provide selective evidence on the impact of natural and manmade disasters on household welfare. First, we consider "ex ante" risk management and "ex post" risk-coping behaviors separately, showing evidence from the Asian economic crisis, earthquakes, and tsunami disasters. Second, we differentiate idiosyncratic risks from nondiversifiable aggregate risks that characterize a disaster. We also discuss the difficulties of designing index-type insurance against natural disasters, which are often rare, unforeseen events. Then, we investigate the role of self-insurance against large-scale disasters under which formal or informal mutual insurance mechanisms are largely ineffective. Credit accessibility is identified as one of the key factors facilitating risk-coping strategies. Copyright 2007 International Association of Agricultural Economists.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1574-0862.2007.00235.x
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Article provided by International Association of Agricultural Economists in its journal Agricultural Economics.

Volume (Year): 37 (2007)
Issue (Month): s1 (December)
Pages: 59-73
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Handle: RePEc:bla:agecon:v:37:y:2007:i:s1:p:59-73

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  1. TAMURA Sakuya & SAWADA Yasuyuki, 2009. "Consumption Insurance against Unforeseen Epidemics:The Case of Avian Influenza in Vietnam," Discussion papers 09023, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
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