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In the Eye of the Storm—The Welfare Impacts of a Hurricane

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  • Jakobsen, Kristian Thor

Abstract

The impact of a large covariant shock, namely Hurricane Mitch, is examined in the context of household asset holdings in rural Nicaragua utilizing household panel data from the period. It is found that the hurricane did not have an adverse impact on the ownership of productive assets among the affected households on average. On the other hand, nonproductive asset holdings seem to have been significantly reduced. A further examination confirms that the shock affected the poorest households disproportionally, especially in terms of nonproductive assets. Finally, this study presents strong suggestive evidence of a geographical poverty trap within the shock-affected areas of the country.

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  • Jakobsen, Kristian Thor, 2012. "In the Eye of the Storm—The Welfare Impacts of a Hurricane," World Development, Elsevier, vol. 40(12), pages 2578-2589.
    • Handle: RePEc:eee:wdevel:v:40:y:2012:i:12:p:2578-2589
    DOI: 10.1016/j.worlddev.2012.05.013
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    3. Arouri, Mohamed & Nguyen, Cuong & Youssef, Adel Ben, 2015. "Natural Disasters, Household Welfare, and Resilience: Evidence from Rural Vietnam," World Development, Elsevier, vol. 70(C), pages 59-77.
    4. Warr, Peter & Aung, Lwin Lwin, 2019. "Poverty and inequality impact of a natural disaster: Myanmar’s 2008 cyclone Nargis," World Development, Elsevier, vol. 122(C), pages 446-461.
    5. Tran, Thi Xuyen, 2021. "Typhoon and Agricultural Production Portfolio Empirical Evidence for a Developing Economy," Working Paper 188/2021, Helmut Schmidt University, Hamburg.
    6. Noy, Ilan & Karim, Azreen, 2013. "Poverty, inequality and natural disasters – A survey," Working Paper Series 18793, Victoria University of Wellington, School of Economics and Finance.

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