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Do Natural Disasters Affect Household Saving? Evidence From the August 2002 Flood in Germany

2025/11/06 by Michael Berlemann, Erik Haustein, Max Friedrich Steinhardt +1 · 1 voice
Agricultural and Biological Sciences · Environmental Science · Social Sciences · #Affect (linguistics) #Agricultural risk and resilience #Disaster Management and Resilience #Exploit #Flood Risk Assessment and Management #Flood myth #Government (linguistics) #Hazard #Natural (archaeology) #Natural disaster #Natural hazard

paper · pdf · doi:10.1007/s41885-025-00182-8

published in Economics of Disasters and Climate Change 10(1) (Springer Science+Business Media)

openalex created_date 2025/11/06 · openalex publication_date 2025/11/06 · openalex updated_date 2026/08/01

Abstract

Abstract Recently, there is a growing interest in understanding how individuals adapt to changing climate conditions and climate-induced extreme weather events. An underexplored question is whether and how climate-related natural hazards affect household saving behavior. For this purpose, we exploit a natural experiment stemming from the European Flood of August 2002. Combining micro data with geo-coded flood maps allows us to analyze the causal impact of flood exposure on household savings within a difference-in-differences setting. We find that flood exposure depresses household saving behavior in the medium run. A likely explanation is moral hazard induced by massive government support for affected households.

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