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The Impact of Perceived Background Risk on Behavioral Health: Evidence from Hurricane Katrina

Pesko, Michael (2016): The Impact of Perceived Background Risk on Behavioral Health: Evidence from Hurricane Katrina.

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Abstract

I explore the hypothesis that Hurricane Katrina in 2005 raised perceived background risks, which had spillover effects on behavioral health outcomes of mental health, substance use, and health insurance. I explore this hypothesis using Behavioral Risk Factor Surveillance System data for 2002-2007. I use a difference-in-difference model to estimate the effect that Hurricane Katrina had in the non-damaged storm surge region, in 90-day intervals leading up to and after the hurricane, compared to areas impervious to hurricanes. Within non-damaged counties at risk of any storm surge, I find causal evidence that Katrina increased poor mental health days by 8.8% for three months after Katrina, and increased smoking by 10% over nine months, which translates to 39.0 million extra days of poor mental health and 1.1 million extra smokers. Results suggest that perceived background risk increases may have important spillover effects on health for people far from the actual disaster, and highlight a hidden cost of the government's failures in managing Hurricane Katrina.

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