Natural Disaster Impacts in the Eye of the Beholder: New Insights from Intra-Household Disagreement

Nguyen, Ha and Mitrou, Francis (2025): Natural Disaster Impacts in the Eye of the Beholder: New Insights from Intra-Household Disagreement.

Abstract

Self-reported natural disaster–related damages have been widely used as a key explanatory variable in empirical models of disaster impacts; however, the accuracy of these measures and the implications of their use remain unclear. Using over 15 years of longitudinal, nationally representative Australian data, this study documents a previously unreported pattern: in more than half of cases where one household member reports weather-related home damage, their co-resident does not. This high rate of intra-household inconsistency is striking, particularly given that respondents are asked the same question within a similar timeframe, and that prior research has generally treated self-reported damage as exogenous to individual behaviour. Household fixed-effects estimates show that individuals with poorer prior health, particularly mental health, lower life satisfaction, residence in disadvantaged areas, or prior exposure to local tropical cyclones are more likely to report damage, either consistently or inconsistently, relative to other household members. Moreover, replacing self-reported damage with a more objective measure substantially attenuates the estimated associations with health and life satisfaction outcomes, while the associations with financial outcomes remain largely unchanged. Taken together, these findings challenge the common assumption that self-reported weather-related home damage is exogenous and underscore the risk of biased inference when endogeneity is not adequately addressed, particularly in analyses of health and life satisfaction outcomes.

• Item Type: MPRA Paper
• Language: English
• Keywords: Measurement Errors; Survey Misreporting; Natural Disasters; Cyclones; Housing
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C18 - Methodological Issues: General; I - Health, Education, and Welfare > I1 - Health; I - Health, Education, and Welfare > I1 - Health > I10 - General; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty; 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 > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics

References

Angrist, J.D., Pischke, J.-S., 2009. Mostly harmless econometrics: An empiricist's companion. Princeton University Press.

Bacquet-Carlier, S., Bernard, A., Perales, F., 2025. Weathering change: Longitudinal patterns of residential mobility following extreme weather events in Australia. Global Environmental Change 94, 103050

Baryshnikova, N.V., Pham, N.T., 2019. Natural disasters and mental health: A quantile approach. Economics letters 180, 62-66

Bernard, A., Perales, F., Charles-Edwards, E., Bacquet-Carlier, S., 2024. Residential mobility responses to home damage caused by floods, cyclones and bushfires in Australia. Population and Environment 46, 1-30

Botzen, W.J.W., Deschenes, O., Sanders, M., 2019. The Economic Impacts of Natural Disasters: A Review of Models and Empirical Studies. Review of Environmental Economics and Policy 13, 167-188

Bound, J., Brown, C., Mathiowetz, N., 2001. Measurement error in survey data. In: Heckman JJ & Leamer E (eds.) Handbook of econometrics. Elsevier, pp. 3705-3843.

Call, K.T., Fertig, A.R., Pascale, J., 2022. Factors associated with accurate reporting of public and private health insurance type. Health Services Research 57, 930-943

Calvi, R., Lewbel, A., Tommasi, D., 2022. LATE With Missing or Mismeasured Treatment. Journal of Business & Economic Statistics 40, 1701-1717

Cameron, A.C., Miller, D.L., 2015. A Practitioner’s Guide to Cluster-Robust Inference. Journal of Human Resources 50, 317-372

Carleton, T., Jina, A., . . . Nath, I., 2022. Valuing the global mortality consequences of climate change accounting for adaptation costs and benefits. The Quarterly Journal of Economics 137, 2037-2105

Celhay, P.A., Meyer, B.D., Mittag, N., 2024. What Leads to Measurement Errors? Evidence from Reports of Program Participation in Three Surveys. Journal of Econometrics 238, 105581

Dell, M., Jones, B.F., Olken, B.A., 2014. What Do We Learn from the Weather? The New Climate–Economy Literature. Journal of Economic Literature 52, 740-798

DiTraglia, F.J., García-Jimeno, C., 2019. Identifying the effect of a mis-classified, binary, endogenous regressor. Journal of Econometrics 209, 376-390

Donaldson, D., Storeygard, A., 2016. The View from Above: Applications of Satellite Data in Economics. Journal of Economic Perspectives 30, 171-98

Gallagher, J., 2023. Retrospective voting and natural disasters that cause no damage: Accounting for the selective reporting of weather damage. Working Paper

Guiteras, R., Jina, A., Mobarak, A.M., 2015. Satellites, Self-Reports, and Submersion: Exposure to Floods in Bangladesh. American Economic Review: Papers & Proceedings 105, 232-36

Gunby, N., Coupé, T., 2023. Weather-Related Home Damage and Subjective Well-Being. Environmental and Resource Economics 84, 409-438

Hsiang, S., Kopp, R.E., 2018. An Economist's Guide to Climate Change Science. Journal of Economic Perspectives 32, 3-32

Hsiang, S.M., Jina, A.S., 2014. The causal effect of environmental catastrophe on long-run economic growth: Evidence from 6,700 cyclones. National Bureau of Economic Research Working Paper No 20352

Johar, M., Johnston, D.W., Shields, M.A., Siminski, P., Stavrunova, O., 2022. The economic impacts of direct natural disaster exposure. Journal of Economic Behavior & Organization 196, 26-39

Le, H.T., Nguyen, H.T., 2017. Parental health and children's cognitive and noncognitive development: New evidence from the longitudinal survey of Australian children. Health Economics 26, 1767–1788

Le, H.T., Nguyen, H.T., 2018. The Impact of Maternal Mental Health Shocks on Child Health: Estimates from Fixed Effects Instrumental Variables Models for two Cohorts of Australian Children. American Journal of Health Economics 4, 185-225

Li, A., Leppold, C., 2025. Long-term mental health trajectories across multiple exposures to climate disasters in Australia: a population-based cohort study. The Lancet Public Health 10, e391-e400

Li, A., Toll, M., Bentley, R., 2023. Health and housing consequences of climate-related disasters: a matched case-control study using population-based longitudinal data in Australia. The Lancet Planetary Health 7, e490-e500

Meyer, B.D., Mittag, N., Goerge, R.M., 2022. Errors in Survey Reporting and Imputation and Their Effects on Estimates of Food Stamp Program Participation. Journal of Human Resources 57, 1605-1644

Meyer, B.D., Mok, W.K.C., Sullivan, J.X., 2015. Household Surveys in Crisis. Journal of Economic Perspectives 29, 199-226

Mitchell, A., Maheen, H., Bowen, K., 2024. Mental health impacts from repeated climate disasters: an Australian longitudinal analysis. The Lancet Regional Health – Western Pacific 47

Nguyen, G., Nguyen, T.T., 2020. Exposure to weather shocks: A comparison between self-reported record and extreme weather data. Economic Analysis and Policy 65, 117-138

Nguyen, H.T., Le, H.T., Blyth, C., Connelly, L., Mitrou, F., 2024a. Identifying the effects of health insurance coverage on health care use when coverage is misreported and endogenous. GLO Discussion Paper Series 1432, Global Labor Organization (GLO)

Nguyen, H.T., Le, H.T., Connelly, L., Mitrou, F., 2023. Accuracy of self-reported private health insurance coverage. Health Economics 32, 2709-2729

Nguyen, H.T., Mitrou, F., 2024a. Delving into the eye of the cyclone to quantify the cascading impacts of natural disasters on life satisfaction. GLO Discussion Paper Series 1446, Global Labor Organization (GLO)

Nguyen, H.T., Mitrou, F., 2024b. Residential responses to cyclones: New evidence from Australia. GLO Discussion Paper Series 1426, Global Labor Organization (GLO)

Nguyen, H.T., Mitrou, F., 2025a. The distributional effects of natural disasters on the Big Five personality traits. GLO Discussion Paper Series 1632, Global Labor Organization (GLO)

Nguyen, H.T., Mitrou, F., 2025b. Extreme weather events, home damage, and the eroding locus of control. Ecological Economics 235, 108659

Nguyen, H.T., Mitrou, F., 2025c. Fertility responses to tropical cyclones: Causal evidence and mechanisms. Journal of Health Economics 104, 103083

Nguyen, H.T., Mitrou, F., 2025d. Natural disasters and the demand for health insurance. Journal of Environmental Economics and Management 130, 103108

Nguyen, H.T., Schurer, S., Mitrou, F., 2024b. The (in)stability of locus of control: New insights from distributional effects of major life events. GLO Discussion Paper Series 1532, Global Labor Organization (GLO)

Nguyen, T.T., Nguyen, T.-T., Le, V.-H., Managi, S., Grote, U., 2020. Reported weather shocks and rural household welfare: Evidence from panel data in Northeast Thailand and Central Vietnam. Weather and Climate Extremes 30, 100286

Noy, I., Nguyen, C.N., Patel, P., 2021. Floods and spillovers: Households after the 2011 great flood in Thailand. Economic Development and Cultural Change 69, 829-868

Osberghaus, D., 2017. The effect of flood experience on household mitigation—Evidence from longitudinal and insurance data. Global Environmental Change 43, 126-136

Schennach, S.M., 2020. Chapter 6 - Mismeasured and unobserved variables. In: Durlauf SN, Hansen LP, Heckman JJ & Matzkin RL (eds.) Handbook of Econometrics. Elsevier, pp. 487-565.

Sharma, N., Kuskoff, E., Parsell, C., Middlebrook, N., 2026. A longitudinal study of the impact of disasters on individual wellbeing. International Journal of Disaster Risk Reduction, 105999

Spencer, N., Strobl, E., 2025. Modeling the Impact of Extreme Climate Events on Household Welfare: An Empirical Framework. Environmental and Resource Economics 88, 921-964

Summerfield, M., Garrard, B., . . . Wilkins, R., 2025. HILDA User Manual – Release 24. Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Wooldridge, J.M., 2010. Econometric Analysis of Cross Section and Panel Data. MIT Press, Cambridge, Mass.