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Residential responses to cyclones: New evidence from Australia

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  • Nguyen, Ha Trong
  • Mitrou, Francis

Abstract

By leveraging randomly timed exposure to local cyclones as natural experiments, this study pioneers a comprehensive causal analysis of cyclone impacts on residential outcomes among Australian individuals. Drawing upon over two decades of nationally representative longitudinal data from the Household, Income and Labour Dynamics in Australia survey, coupled with historical cyclone records, individual fixed effects models uncover substantial increases in reported home damage. Planned relocation intentions and actual migration experiences show moderate increases, particularly in cases of higher cyclone severity and proximity. Additionally, these cyclones prompt individuals to acknowledge the significance of home-related insurance and actively seek coverage. Alongside long-distance domestic migration, insurance acquisition emerges as another alternative coping mechanism, effectively mitigating future repair costs. Extensive heterogeneity analyses reveal that the choice among these coping strategies depends on factors such as cyclone severity, age, prior homeownership, income, insurance coverage, rural/urban residence, coastal proximity, and community cyclone history. Moreover, the study identifies home damage from cyclones as a key factor driving observed migration patterns.

Suggested Citation

  • Nguyen, Ha Trong & Mitrou, Francis, 2024. "Residential responses to cyclones: New evidence from Australia," GLO Discussion Paper Series 1426, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1426
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    File URL: https://www.econstor.eu/bitstream/10419/290152/1/GLO-DP-1426.pdf
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    References listed on IDEAS

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    1. Marjorie C. Pajaron & Glacer Niño A. Vasquez, 2020. "Weathering the storm: weather shocks and international labor migration from the Philippines," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(4), pages 1419-1461, October.
    2. V. Smith & Jared Carbone & Jaren Pope & Daniel Hallstrom & Michael Darden, 2006. "Adjusting to natural disasters," Journal of Risk and Uncertainty, Springer, vol. 33(1), pages 37-54, September.
    3. Josiah Hickson & Joseph Marshan, 2022. "Labour Market Effects of Bushfires and Floods in Australia: A Gendered Perspective," The Economic Record, The Economic Society of Australia, vol. 98(S1), pages 1-23, September.
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    Cited by:

    1. Nguyen, Ha Trong & Mitrou, Francis, 2025. "Natural disasters and the demand for health insurance," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    2. Nguyen, Ha Trong & Mitrou, Francis, 2025. "Extreme weather events, home damage, and the eroding locus of control," Ecological Economics, Elsevier, vol. 235(C).
    3. Nguyen, Ha Trong & Mitrou, Francis, 2025. "Fertility responses to tropical cyclones: Causal evidence and mechanisms," Journal of Health Economics, Elsevier, vol. 104(C).

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    More about this item

    Keywords

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    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G52 - Financial Economics - - Household Finance - - - Insurance
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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