Scientific literature has established that the frequency and intensity of flood and wildfire events is rising, and this increase is directly attributed to climate change (IPCC 2012). Increasing changes in precipitation, wind, and temperatures are markers of climate change, and the manifestation of these changes as flood and wildfire events directly affects human well-being. A growing body of research estimates the impacts of natural disasters on outcomes such as health and aggregate economic growth but only little work sheds light on the effects of disasters on household finances. Households may plan for low probability natural events by purchasing insurance. However, these external shocks often result in high unanticipated expenses, that affect the financial stability of the household. This paper attempts to identify aspects of household finance affected by such external shocks, and estimate their magnitude. Using event occurrences in the contiguous United States on floods (SED-NOAA), wildfires (MTBS-USGS), disaster proclamations (FEMA) we estimate the impact of these events on the financial well-being of individual households. We use detailed household finance information obtained from the Panel Study of Income Dynamics (PSID) to estimate changes in household finance parameters.

Accepted Oral Presentation