Sri Lankan Households a Decade after the Indian Ocean Tsunami

33 Pages Posted: 29 Nov 2016

See all articles by Diana De Alwis

Diana De Alwis

Victoria University of Wellington

Ilan Noy

Victoria University of Wellington

Multiple version iconThere are 2 versions of this paper

Date Written: October 20, 2016

Abstract

We estimate the causal effect of the Indian Ocean tsunami in Sri Lanka on household income and consumption eight years after the event, using a quasi-experimental method. A strong association between area-wide tsunami disaster shock and increases in household income and consumption in the long-term emerged from our empirical investigation. Deviating from the common observation on short-term impacts, these results are suggestive of an optimistic potential for some long-lasting potentially successful recovery scenarios. Still, Sri Lanka received a very large amount of external transfers post-tsunami, much larger than is typical for disaster events and one which may not be replicable in other cases. Our findings suggest a more nuanced picture with respect to household consumption impacts. We observe a reduction of food consumption and only find an increase in non-food consumption. The increase in non-food consumption is much smaller than the observed increase in income. We also find that households in high-income regions experienced much better recovery from the disaster.

Keywords: Sri Lanka, tsunami, disaster, household survey, long-run impact

JEL Classification: Q540, R110

Suggested Citation

De Alwis, Diana and Noy, Ilan, Sri Lankan Households a Decade after the Indian Ocean Tsunami (October 20, 2016). CESifo Working Paper Series No. 6136, Available at SSRN: https://ssrn.com/abstract=2876555

Diana De Alwis

Victoria University of Wellington ( email )

P.O. Box 600
Wellington, 6140
New Zealand

Ilan Noy (Contact Author)

Victoria University of Wellington ( email )

P.O. Box 600
Wellington, 6140
New Zealand

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