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Sitting in the same boat: Subjective well-being and social comparison after an extreme weather event

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  • Krähnert, Kati
  • Fluhrer, Svenja

Abstract

How does subjective well-being depend on the fate of others when a covariate shock strikes? In this paper, we address this question by providing novel evidence on the impact of shock-induced damages experienced by individuals and their reference group on life satisfaction. We do so by examining the case of pastoralists in Mongolia that faced a oncein-50-years winter disaster. Our identification strategy exploits the quasi-experimental nature of the extreme event. The empirical analysis builds on a detailed household panel survey, which we complement with aggregated climate data and historic livestock census data. Results show that exposure to the extreme event significantly and strongly reduces subjective well-being even 4-5 years after the event occurred. The negative shock impact is amplified by observing peers doing economically worse. Similarly, exposure to the extreme event increases the perceived inequality among households with assets at risk. We argue that the event increases sectoral disparities between pastoralists and households not engaged in agriculture.

Suggested Citation

  • Krähnert, Kati & Fluhrer, Svenja, 2021. "Sitting in the same boat: Subjective well-being and social comparison after an extreme weather event," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242379, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc21:242379
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    Cited by:

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    2. Mogge, Lukas & Roeckert, Julian & Krähnert, Kati, 2024. "Impacts of anticipatory cash transfers in the context of weather disasters," Ruhr Economic Papers 1065, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Boqiang Lin & Huanyu Jia, 2023. "The role of peers in promoting energy conservation among Chinese university students," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    4. Hongyun Zheng & Wanglin Ma & Junpeng Li & Julio Botero, 2023. "Relationship between Internet Use and Negative Affect," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(4), pages 1693-1713, August.
    5. Mulungu, Kelvin & Kilimani, Nicholas, 2023. "Does forest access reduce reliance on costly shock-coping strategies? Evidence from Malawi," Ecological Economics, Elsevier, vol. 209(C).

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    More about this item

    Keywords

    extreme weather event; pastoralism; self-reported shock; socialcomparison; subjective well-being;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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