An autonomous research institute under the Ministry of Finance


Chennai 2015: A novel approach to measuring the impact of a natural disaster

Publication date

Dec, 2019


NIPFP Working Paper No. 285


Ila Patnaik, Renuka Sane and Ajay Shah


We estimate the impact of one flood on economic outcomes of households located in the region (Chennai, India). We measure the impact of the flood on income and consumption of households, and explore heterogeneity in impact by prosperity and fi nancial constraints. We exploit a novel panel dataset (the CMIE CPHS) which covers 170,000 households in India, three times a year.
We fi nd that immediately after the floods, there was a sharp increase in consumption, which is reversed over a year. Expenditures are financed by not saving, or postponing asset purchases. The expenditure increase for the more vulnerable, or the fi nancially constrained households, is smaller. This may be consistent with greater hardship for them.
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