Direct shock experience vs. tangential shock exposure: Indirect effects of flood shocks on well-being and preferences

Stein, Wiebke; Weisser, Reinhard A.

Abstract

With extreme weather events on the rise, the question of how witnessing adverse weather events may affect individuals' perception, and consequently their subjective well-being, gains in relevance. To identify events that have been witnessed, i.e., tangential exposure to a weather shock, satellite-based data on flooding is linked to an extensive household panel survey from rural Southeast Asia. Contrasting direct shock experience with tangential shock exposure, we find that mere proximity to a potentially adverse shock, without reporting any actual direct shock experience, could be sufficient to reduce subjective well-being. This effect is not only restricted to the present but can also impinge on expected future well-being dynamics. Eventually, such a persistent effect from witnessing a weather shock may have further politico-economic repercussions, for instance, by altering support for redistribution policies.

• Journal Article Type: Article
• Acceptance Date: Feb 1, 2022
• Online Publication Date: Aug 31, 2022
• Publication Date: Nov 30, 2022
• Deposit Date: Jul 18, 2023
• Publicly Available Date: Jul 20, 2023
• Journal: World Bank Economic Review
• Print ISSN: 0258-6770
• Electronic ISSN: 1564-698X
• Publisher: Oxford University Press (OUP)
• Peer Reviewed: Peer Reviewed
• Volume: 36
• Issue: 4
• Pages: 909-933
• DOI: https://doi.org/10.1093/wber/lhac012
• Public URL: https://uwe-repository.worktribe.com/output/10955260