The effect of natural disaster and government aid on the income and consumption of rural households:
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| Title | The effect of natural disaster and government aid on the income and consumption of rural households:
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| Author | Feng Shuaizhang, Lu Jingliang and Ai Chunrong |
| Organization | School of Economics, Shanghai University of Finance and Economics; Institute for Advanced Research, Shanghai University of Finance and Economics |
| Email | shuaizhang.feng@gmail.com |
| Key Words | Farm Household Income; Farm Household Consumption; Natural Disaster; Government Aid; Wenchuan Earthquake |
| Abstract | Using a unique rural household survey data in Sichuan collected in 2007 and 2009, we analyze the effect of the 2008 Wenchuan earthquake on income and consumption of farm households, as well as the role played by government aid. On average, household income declined by 12% after the earthquake, although we have identified human capital and non-agricultural employment as important income-stabilizing factors. Living subsidies from the government are more than enough to offset losses in annual income, but special government aid and bank loans for housing reconstruction are not sufficient to cover all housing-rebuilding expenditures. Across different households, the distribution of government aids is mainly affected by household size, whether the household has a communist party member, and the degree of damage of houses. Consumption has been stabilized after the earthquake, mainly due to living subsidies provided by the government. |
| Serial Number | WP121 |
| Time | 2011-10-27 |
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