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

50 Pages Posted: 19 May 2015

See all articles by Michael Berlemann

Michael Berlemann

University of the German Federal Armed Forces - Helmut Schmidt Universität; CESifo (Center for Economic Studies and Ifo Institute)

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

Date Written: May 19, 2015

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: Q540, D140, O160, H840

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 (May 19, 2015). CESifo Working Paper Series No. 5344. Available at SSRN: https://ssrn.com/abstract=2607938

Michael Berlemann (Contact Author)

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

Holstenhofweg 85
Hamburg, 22043
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschingerstr. 5
Munich, DE-81679
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, 20122
Italy

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

Hamburg Institute of International Economics (HWWI) ( email )

Heimhuder Str.71
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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