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Earthquake and household energy consumption – Evidence from the Wenchuan earthquake in China

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  • Yin, Zhichao
  • Yan, Yu
  • Chen, Xirong
  • Liu, Taixing

Abstract

In this article, we focus on how household consumption responded to the Wenchuan earthquake in China. Based on the data from 2007, 2008 and 2009 from the China Urban Household Survey, we adopt the difference-in-difference model (DID) and find that the Wenchuan earthquake significantly restrained household consumption. First, the total consumption, energy consumption and energy consumption ratio were suppressed by the Wenchuan earthquake. The negative impact was mainly driven by the “living like there's no tomorrow” effect, and the consumption decisions of the affected households were not always identical. A possible mechanism is salience theory. Second, both the energy consumption ratio and fuel consumption ratio were dramatically reduced by the Wenchuan earthquake. Third, transfer payments helped households mitigate adverse impacts. In addition, households with low education, low income and low social networks were the most strongly affected by the Wenchuan earthquake.

Suggested Citation

  • Yin, Zhichao & Yan, Yu & Chen, Xirong & Liu, Taixing, 2022. "Earthquake and household energy consumption – Evidence from the Wenchuan earthquake in China," Energy Economics, Elsevier, vol. 111(C).
    • Handle: RePEc:eee:eneeco:v:111:y:2022:i:c:s0140988322002274
    DOI: 10.1016/j.eneco.2022.106061
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    More about this item

    Keywords

    Wenchuan earthquake; Natural disaster; Household consumption; Energy consumption;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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