Natural disasters and well-being in India: A household-level panel data analysis

Abstract

We provide first estimates of the impact of cumulative natural disasters on well-being in India disaggregated by social and economic groups. We use a nationally representative panel data set in a difference in difference model with fixed effects at the household level and a continuous treatment. We use monthly consumption expenditure adjusted for health expenditure as an indicator of well-being. We find that natural disasters have a consistent and significant negative impact on consumption across all social and economic groups. We also find that assets, health insurance, membership in groups, and the number of married females in the household are positive and significant. On the other hand, conflict intensity, number of persons in the household, the proportion of children in the household and public project intensity have a negative and significant coefficient. In the disaggregated results some variables provide consistent results across all caste groups and economic quintiles among the covariates. Among them are Assets owned by households, membership intensity and health insurance which positively impact on consumption. At the same time, the number of persons in the household and the proportion of children in the household have a negative and significant impact. Social capital too influences consumption. We find that conflict intensity has a significant and negative impact on consumption for some caste and economic groups, but not all. Some variables provided mixed results like public project intensity, number of married females, among others.