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Do Natural Disasters Affect Household Saving? Evidence From the August 2002 Flood in Germany

Year: 2025

Type: article

Abstract: Recently, there is a growing interest in understanding how individuals adapt to changing climate conditions and climate-induced extreme weather events. An underexplored question is whether and how climate-related natural hazards affect household saving behavior. For this purpose, we exploit a natural experiment stemming from the European Flood of August 2002. Combining micro data with geo-coded flood maps allows us to analyze the causal impact of flood exposure on household savings within a difference-in-differences setting. We find that flood exposure depresses household saving behavior in the medium run. A likely explanation is moral hazard induced by massive government support for affected households.

Source: Refubium (Universitätsbibliothek der Freien Universität Berlin)

DOI: 10.17169/refubium-49895

Authors: Berlemann, Michael, Haustein, Erik, Steinhardt, Max F., Tutt, Jascha

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Climate action, No poverty

Open Access status: green

Funders: Bundesministerium für Bildung und Forschung, Universität Hamburg, European Association of Environmental and Resource Economists

OpenAlex ID: W7104280723