Journal
JOURNAL OF ENVIRONMENTAL ECONOMICS AND MANAGEMENT
Volume 90, Issue -, Pages 249-268Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
DOI: 10.1016/j.jeem.2018.06.007
Keywords
Disaster; Resource sharing; Resource pooling; Informal network; Risk sharing
Categories
Funding
- Monash University
- Australian Research Council
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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. (C) 2018 Elsevier Inc. All rights reserved.
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