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Do networks matter after a natural disaster? A study of resource sharing within an informal network after Cyclone Aila

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  • Islam, Asad
  • Nguyen, Chau

Abstract

Natural disasters frequently occur across both developed and developing countries. The vast majority of lives that are lost and affected by natural disasters are from poor areas in developing countries. We examine the post-disaster recovery of the households in rural Bangladesh that were affected by Cyclone Aila from 2009 to 2010. Exploiting exogenous variations in households' exposure to the disaster within the village, we provide empirical evidence of resource sharing within the households' informal network of neighbors and relatives to assist in recovery from the natural disaster. We find a household's own exposure to the disaster had no significant effect on its investment and income; however, exposure to a household's network had a significant effect on household investment and income two years and six months after the cyclone. We find that informal resource sharing within a household's network crowded out the household's need to purchase formal insurance against disasters.

Suggested Citation

  • Islam, Asad & Nguyen, Chau, 2018. "Do networks matter after a natural disaster? A study of resource sharing within an informal network after Cyclone Aila," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 249-268.
  • Handle: RePEc:eee:jeeman:v:90:y:2018:i:c:p:249-268
    DOI: 10.1016/j.jeem.2018.06.007
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    Cited by:

    1. Tanvir Pavel & Syed Hasan & Nafisa Halim & Pallab Mozumder, 2018. "Natural Hazards and Internal Migration: The Role of Transient versus Permanent Shocks," Working Papers 1806, Florida International University, Department of Economics.

    More about this item

    Keywords

    Disaster; Resource sharing; Resource pooling; Informal network; Risk sharing;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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