Extreme weather events, home damage, and the eroding locus of control

Nguyen, Ha and Mitrou, Francis (2025): Extreme weather events, home damage, and the eroding locus of control. Forthcoming in: Ecological Economics (2025): p. 108659.

Abstract

The catastrophic consequences of natural disasters on social and economic systems are extensively documented, yet their influence on individuals' sense of control over their life outcomes remains unexplored. This study pioneers an investigation into the causal effects of natural disaster-related home damage on the locus of control. Utilizing Australian longitudinal data, we implement an individual fixed effects instrumental variables approach leveraging time-varying, exogenous exposure to local cyclones to address confounding factors. Our findings provide robust evidence that natural disaster-induced home damage statistically significantly and substantially diminishes individuals’ perception of control, particularly for those at the lower end of the locus of control distribution. This effect is disproportionately pronounced among older individuals, renters, and those from lower-income households. This newfound understanding offers opportunities for developing targeted interventions and support mechanisms to enhance resilience and assist these vulnerable populations following natural disasters.

• Item Type: MPRA Paper
• Language: English
• Keywords: Natural Disasters; Locus of Control; Housing; Australia
• Subjects: I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I31 - General Welfare, Well-Being; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R20 - General

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