Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/147390 
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper No. 6136
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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.
Subjects: 
Sri Lanka
tsunami
disaster
household survey
long-run impact
JEL: 
Q54
R11
Document Type: 
Working Paper
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