We would like to thank the Quality of Life Policy Bureau, the Cabinet Office, and Hyogo Prefecture for providing us with the valuable micro-level data set. We would also like to thank the editor of the journal, Masao Ogaki, and the anonymous referee for very constructive review comments, which helped to substantially improve this paper. In addition, we are grateful to Kenn Ariga, Toni Braun, Joe Chen, Hidehiko Ichimura, Ichiro Ide, Kei Kajisa, Kazuya Kamiya, Ryuta Kato, Miki Kohara, Honbin Li, Colin McKenzie, Yoshiro Miwa, Keiko Murata, Hiroshi Ohashi, Tetsuji Okazaki, Albert Park, Innwon Park, Ralph Paprzycki, Makoto Saito, Akihisa Shibata, Masahiro Shoji, and Tetsushi Sonobe for their valuable comments. Moreover, we benefited from comments from participants of the Great Hanshin-Awaji Earthquake Memorial Symposium of Kobe University, the conference on the development of post disaster areas in Indonesia of the Indonesian Economists Association, the FASID Hakone conference, and the East Asian Economic Association Conference in 2004. Suggestions we received at the Economic and Social Research Institute of the Cabinet Office, the Chinese University of Hong Kong, Hitotsubashi University, the University of Shiga, the University of Tokyo, and Uppsala University are also greatly appreciated. The views expressed in this study do not necessarily represent those of the organizations to which the authors belong and we are solely responsible for any remaining errors.
How Do People Cope with Natural Disasters? Evidence from the Great Hanshin-Awaji (Kobe) Earthquake in 1995
Version of Record online: 29 MAR 2008
©2008 The Ohio State University
Journal of Money, Credit and Banking
Volume 40, Issue 2-3, pages 463–488, March/April 2008
How to Cite
SAWADA, Y. and SHIMIZUTANI, S. (2008), How Do People Cope with Natural Disasters? Evidence from the Great Hanshin-Awaji (Kobe) Earthquake in 1995. Journal of Money, Credit and Banking, 40: 463–488. doi: 10.1111/j.1538-4616.2008.00122.x
- Issue online: 29 MAR 2008
- Version of Record online: 29 MAR 2008
- Received January 4, 2005; and accepted in revised form August 8, 2007.
- natural disasters;
- risk sharing;
- risk-coping strategies
This paper investigates the coping strategies employed by victims of the Great Hanshin-Awaji (Kobe) earthquake in 1995. Using a unique household data set, we show that households that held a large amount of collateralizable assets before the catastrophe and were free from a binding borrowing constraint were able to maintain their consumption levels by borrowing. In contrast, households subject to a binding borrowing constraint before the disaster were unable to borrow to cope with the losses inflicted by the earthquake. On the other hand, both types of households relied on private transfers, depending on the extent of the damage.