Rising waters, falling well-being: The effects of the 2013 East German flood on subjective well-being

Abstract

This paper examines the effects of the 2013 flood disaster in East Germany on subjective wellbeing. Merging geo-spatial flood data with longitudinal data from the Socio-Economic Panel (SOEP), we use a panel event study design for the analysis. Our results show that those affected by the flood report a significant life satisfaction drop of 0.17 points on an 11-point scale, which is equivalent to a 2.5% fall from pre-flood levels, in the year after the flood. The effect is more severe in peripheral areas than in central areas, and for low-income individuals than for high-income individuals. The effect, however, dissipates by 2015. Additionally, we observe a notable initial decrease in health satisfaction, followed by recovery, while financial satisfaction was largely unaffected.