Empirical Evidence for U.S. Hurricanes
with Marina Eurich, Working Paper
The ongoing process of climate change goes along with an increase in the frequency and severity of various sorts of natural disasters. While the existing literature has almost exclusively focused on studying the direct effects resulting from different types of disasters, the effect of changing disaster risk so far has largely been neglected. In this paper we study the effect of hurricane risk on individual self-reported life satisfaction. In order to do so we combine geo-referenced survey data from the U.S. Gallup Daily Survey and hurricane data for the United States. Using Willoughby’s (2006) wind field model we construct time-varying indicators of hurricane risk on the zipcode-level for the period of 2010 to 2018, based on historical hurricane data. We then study whether the time-varying hurricane risk indicators affect self-reported life satisfaction in a two-way fixed effects model. Our findings indicate that regions with comparatively high hurricane risk report significantly lower levels of life satisfaction than their counterparts in less hurricane-prone regions, even after controlling for zipcode-specific, time-specific and individual-specific differences. Thus, the impacts of natural disasters on life satisfaction tend to be underestimated when focusing on the direct effects exclusively.
Precipitation and Economic Growth
with Daniela Wenzel, Working Paper, 2019
As the ongoing process of global warming goes along with changes in both mean precipitation and precipitation extremes, the scientific interest in the effects of rainfall on economic prosperity has recently grown significantly. However, the few existing empirical studies of short-run growth effects of precipitation deliver inconclusive results. The medium- and long-run growth perspective is yet mostly unexplored. In this paper we deliver a systematic analysis of the short- and long-run growth effects of rainfall based on a large panel dataset covering more than 150 countries over the period of 1950 to 2014. We find strong and highly robust empirical evidence for long-lasting negative growth effects of rainfall shortages in poor and underdeveloped countries, which are not driven by the subsample of Sub Saharan African countries.
Evidence from Bank Account Data
with Marc-Andre Luik, Working Paper, 2018
In this paper we employ the natural experiment of German Division and Reunification in order to study the effect of institutional reform on the decision to hold risky
assets. We present empirical evidence indicating that even 16 years after German Reunification risky portfolios of East andWest German bank customers differed systematically, even after controlling
for wealth and other socio-demographic factors. While these differences are especially pronounced for bank customers with experiences in the former communist system, even the younger generation of
East Germans still differs remarkably from their West German counterparts in terms of risky asset choice. Thus, informal institutions tend to have long-lasting effects on portfolio
Evidence From the August 2002 Flood in Germany
with Erik Haustein, Max Steinhardt and Jascha Tutt, Working Paper, November 2019
In the global warming debate, there is a growing interest in understanding the economic implications of extreme weather events. An underexplored question is whether and how natural disasters affect household saving behavior. For this purpose, we exploit a natural experiment stemming from the European Flood of August 2002. Combing micro data from the German Socio-Economic Panel with geo-coded flood maps allows us to analyze the causal impact of flood exposure on household savings within a difference-in-differences setting. Our empirical results suggest flood exposure depresses household saving behavior in the medium run. The most likely explanation for this surprising finding is moral hazard induced by massive government support for the affected households.