AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Natural Disaster Expectations and Household Adaptation
AEA Papers and Proceedings
(pp. 527–531)
Abstract
How do households form expectations about the risk of future natural disasters, and how do these expectations translate into household adaptation choices? A stylized model of natural disasters yields predictions that higher perceived risk should increase precautionary savings, protective investments, insurance take-up, and out-migration. Using survey data from Puerto Rico collected after Hurricane Maria, I find that households are quite pessimistic about future hurricane risk. However, adaptation responses are muted, and the relationship between disaster expectations and adaptation decisions is limited. These patterns raise important puzzles about household responses to natural disaster risk.Citation
Aron-Dine, Shifrah. 2026. "Natural Disaster Expectations and Household Adaptation." AEA Papers and Proceedings 116: 527–531. DOI: 10.1257/pandp.20261028Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D84 Expectations; Speculations
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- Q54 Climate; Natural Disasters and Their Management; Global Warming