TY - JOUR
T1 - Quantifying the costs of drought
T2 - New evidence from life satisfaction data
AU - Carroll, Nick
AU - Frijters, Paul
AU - Shields, Michael A.
PY - 2009/4
Y1 - 2009/4
N2 - We estimate the cost of droughts by matching rainfall data with individual life satisfaction. Our context is Australia over the period 2001 to 2004, which included a particularly severe drought. Using fixed-effect models, we find that a drought in spring has a detrimental effect on life satisfaction equivalent to an annual reduction in income of A$18,000. This effect, however, is only found for individuals living in rural areas. Using our estimates, we calculate that the predicted doubling of the frequency of spring droughts will lead to the equivalent loss in life satisfaction of just over 1% of GDP annually.
AB - We estimate the cost of droughts by matching rainfall data with individual life satisfaction. Our context is Australia over the period 2001 to 2004, which included a particularly severe drought. Using fixed-effect models, we find that a drought in spring has a detrimental effect on life satisfaction equivalent to an annual reduction in income of A$18,000. This effect, however, is only found for individuals living in rural areas. Using our estimates, we calculate that the predicted doubling of the frequency of spring droughts will lead to the equivalent loss in life satisfaction of just over 1% of GDP annually.
KW - Drought
KW - Income-equivalence
KW - Life Satisfaction
UR - http://www.scopus.com/inward/record.url?scp=60449098830&partnerID=8YFLogxK
U2 - 10.1007/s00148-007-0174-3
DO - 10.1007/s00148-007-0174-3
M3 - Article
SN - 0933-1433
VL - 22
SP - 445
EP - 461
JO - Journal of Population Economics
JF - Journal of Population Economics
IS - 2
ER -