Does drought risk depress expected well-being?

ABSTRACT

The effect of natural hazard risk on individual well-being has so far largely been neglected in the empirical literature. We contribute to filling this gap by combining geo-referenced survey data with a time- and region-varying indicator of drought risk for the United States. We find that individuals living in regions with higher drought risk report significantly lower expected future life satisfaction, even after controlling for zip-code-specific, time-specific and individual-specific differences. This effect turns out to be much stronger for comparatively poor individuals.

KEYWORDS:

• Drought risk
• life satisfaction
• global warming

JEL CLASSIFICATION:

• I31 Q51 Q54

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ For a more detailed description see Svoboda et al. (2002).

² The complete regression results are available from the authors on request.

³ The results are available from the authors on request.

Additional information

Funding

This work was supported by the Federal Ministry of Education and Research [01LA1819A].