Does hurricane risk affect individual well-being? Empirical evidence on the indirect effects of natural disasters

While natural disasters might have numerous direct (typically negative) effects, the effect of an increase of natural disaster risk on individual well-being is often neglected. In this paper we study the effects of natural disaster risk on self-reported happiness and life satisfaction at the example of tropical storms. Combining several waves of the integrated European/World Values Survey and appropriate storm data we find a systematically negative effect of hurricane risk on both measures of individual well-being in relatively poor countries in which the population has little possibilities to take protective measures against storms. In highly developed countries, we find a systematic negative and much smaller effect only for life satisfaction. Altogether we conclude that disaster risk tends to play a role for individual well-being, especially on low levels of development.