2008
DOI: 10.1111/j.1538-4616.2008.00122.x
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How Do People Cope with Natural Disasters? Evidence from the Great Hanshin‐Awaji (Kobe) Earthquake in 1995

Abstract: This paper investigates the coping strategies employed by victims of the Great Hanshin-Awaji (Kobe) earthquake in 1995. Using a unique household data set, we show that households that held a large amount of collateralizable assets before the catastrophe and were free from a binding borrowing constraint were able to maintain their consumption levels by borrowing. In contrast, households subject to a binding borrowing constraint before the disaster were unable to borrow to cope with the losses inflicted by the e… Show more

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Cited by 129 publications
(63 citation statements)
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“…While macroeconomic studies have focused on the aggregate consequences of natural disasters (Cavallo, Powell, & Becerra, 2010), micro-level studies have mainly analysed the role of institutions, insurance, and coping strategies in the aftermath of natural disasters (Khandker, 2007;Sawada & Shimizutani, 2008).…”
Section: Disasters Trust and Reciprocitymentioning
confidence: 99%
“…While macroeconomic studies have focused on the aggregate consequences of natural disasters (Cavallo, Powell, & Becerra, 2010), micro-level studies have mainly analysed the role of institutions, insurance, and coping strategies in the aftermath of natural disasters (Khandker, 2007;Sawada & Shimizutani, 2008).…”
Section: Disasters Trust and Reciprocitymentioning
confidence: 99%
“…In this context, it is worth noting that whereas we focus on the impact on firm investment, the Kobe earthquake has also been used to examine the effect on household consumption and household borrowing constraints. An example is the study by Sawada and Shimizutani (), which finds that borrowing constraints played an important role in household consumption in the wake of the disaster.…”
mentioning
confidence: 99%
“…Sawada and Shimizutani (2005) point out that when the 1995 earthquake hit Kobe, Japan, ''…only 3% of the property in the Hyogo Prefecture, where Kobe is located, was covered by earthquake insurance …'' (p. 2). Given the more limited economic base and lower levels of GDP in Pacific island nations, it is reasonable to conclude that their ability to recover from severe weather impacts will be more constrained than in a nation with a wealthier and more diversified economy.…”
Section: Extreme Weather Eventsmentioning
confidence: 98%