Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242379 
Year of Publication: 
2021
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2021: Climate Economics
Publisher: 
ZBW - Leibniz Information Centre for Economics, Kiel, Hamburg
Abstract: 
How does subjective well-being depend on the fate of others when a covariate shock strikes? In this paper, we address this question by providing novel evidence on the impact of shock-induced damages experienced by individuals and their reference group on life satisfaction. We do so by examining the case of pastoralists in Mongolia that faced a oncein-50-years winter disaster. Our identification strategy exploits the quasi-experimental nature of the extreme event. The empirical analysis builds on a detailed household panel survey, which we complement with aggregated climate data and historic livestock census data. Results show that exposure to the extreme event significantly and strongly reduces subjective well-being even 4-5 years after the event occurred. The negative shock impact is amplified by observing peers doing economically worse. Similarly, exposure to the extreme event increases the perceived inequality among households with assets at risk. We argue that the event increases sectoral disparities between pastoralists and households not engaged in agriculture.
Subjects: 
extreme weather event
pastoralism
self-reported shock
socialcomparison
subjective well-being
JEL: 
I30
D63
O13
O15
Q54
Document Type: 
Conference Paper

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