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

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  • Michael Berlemann
  • Max Steinhardt
  • Jascha Tutt

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.

Suggested Citation

  • Michael Berlemann & Max Steinhardt & Jascha Tutt, 2015. "Do Natural Disasters Stimulate Individual Saving? Evidence from a Natural Experiment in a Highly Developed Country," CESifo Working Paper Series 5344, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5344
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    Citations

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    Cited by:

    1. Andor, Mark & Osberghaus, Daniel & Simora, Michael, 2017. "Natural disasters and governmental aid: Is there a charity hazard?," Ruhr Economic Papers 738, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Michael Berlemann & Daniela Wenzel, 2018. "Precipitation and Economic Growth," CESifo Working Paper Series 7258, CESifo Group Munich.
    3. repec:spr:qualqt:v:53:y:2019:i:2:d:10.1007_s11135-018-0776-8 is not listed on IDEAS
    4. Berlemann, Michael, 2016. "Does hurricane risk affect individual well-being? Empirical evidence on the indirect effects of natural disasters," Ecological Economics, Elsevier, vol. 124(C), pages 99-113.
    5. Michael Berlemann & Daniela Wenzel, 2016. "Hurricanes, Economic Growth and Transmission Channels - Empirical Evidence for Developed and Underdeveloped Countries," CESifo Working Paper Series 6041, CESifo Group Munich.
    6. repec:oup:cesifo:v:63:y:2017:i:4:p:353-385. is not listed on IDEAS
    7. Kevin Luo & Tomoko Kinugasa, 2018. "Do natural disasters influence long-term saving?: Assessing the impact of the 2008 Sichuan earthquake on household saving rates using synthetic control," Discussion Papers 1804, Graduate School of Economics, Kobe University.

    More about this item

    Keywords

    natural disasters; floods; growth; saving behavior; difference-in-differences approach;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid

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