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

51 Pages Posted: 11 May 2015

See all articles by Michael Berlemann

Michael Berlemann

Ifo Institute Dresden

Max Friedrich Steinhardt

Free University of Berlin (FUB) - Department of Business and Economics; IZA Institute of Labor Economics; Centro Studi Luca D'Agliano (LdA); Hamburg Institute of International Economics (HWWI)

Jascha Tutt

University of the German Federal Armed Forces - Helmut Schmidt Universität; University of Hamburg

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.

Keywords: natural disasters, floods, growth, saving behavior, difference-in-differences approach

JEL Classification: Q54, D14, O16, H84

Suggested Citation

Berlemann, Michael and Steinhardt, Max Friedrich and Tutt, Jascha, Do Natural Disasters Stimulate Individual Saving? Evidence from a Natural Experiment in a Highly Developed Country. IZA Discussion Paper No. 9026, Available at SSRN: https://ssrn.com/abstract=2604389 or http://dx.doi.org/10.2139/ssrn.2604389

Michael Berlemann (Contact Author)

Ifo Institute Dresden ( email )

Einsteinstrasse 3
01069 Dresden, 01062
Germany

Max Friedrich Steinhardt

Free University of Berlin (FUB) - Department of Business and Economics ( email )

Boltzmannstrasse 20
D-14195 Berlin, 14195
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Centro Studi Luca D'Agliano (LdA) ( email )

Via P. Amedeo 34
Milano, Mi 20122
Italy

HOME PAGE: http://https://sites.google.com/site/maxfriedrichsteinhardt/

Hamburg Institute of International Economics (HWWI) ( email )

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Hamburg, 20148
Germany
0049-40-340576-662 (Phone)
0049-(0)40-340576776 (Fax)

HOME PAGE: http://https://sites.google.com/site/maxfriedrichsteinhardt/

Jascha Tutt

University of the German Federal Armed Forces - Helmut Schmidt Universität ( email )

Holstenhofweg 85
Hamburg, 22008
Germany

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

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