Impact of Disaster on Household Expenditures Using a Difference-in-Difference Analysis

Abstract

This study investigates the impact of the 2012 typhoon on household consumption expenditures in South Korea using a difference-indifferences model. We analyzed the changes in household consumption expenditures based on the extent and severity of disaster damage. Additionally, how these impacts vary depending on the employment status of the household head and the household’s income quartile was explored. The findings indicate that households experiencing disaster damage tend to reduce their consumption expenditures compared to unaffected households. Notably, households in the lowest income quintile and those with heads engaged in temporary or self-employment experience more significant declines. These research findings provide valuable insights for shaping future policies aimed at supporting household recovery and effectively directing post-disaster assistance resources.