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Private transfers to cope with a natural disaster: evidence from Bangladesh*

Published online by Cambridge University Press:  01 April 2009

PALLAB MOZUMDER ,
ALOK K. BOHARA ,
ROBERT P. BERRENS  and
NAFISA HALIM
PALLAB MOZUMDER
Affiliation:
Department of Environmental Studies and International Hurricane Research Center, Florida International University, Miami, FL 33199, USA. Tel: (305)-348-7146, Fax: (305)-348-1761. Email: mozumder@fiu.edu
ALOK K. BOHARA
Affiliation:
Department of Economics, University of New Mexico, Albuquerque, NM 87131, USA
ROBERT P. BERRENS
Affiliation:
Department of Economics, University of New Mexico, Albuquerque, NM 87131, USA
NAFISA HALIM
Affiliation:
Department of Sociology, University of New Mexico, Albuquerque, NM 87131, USA
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Abstract

Based on multiple rounds of household survey data collected in the year after the 1998 massive flooding in Bangladesh, we investigate the role of private transfers as a social coping response to natural disasters. We also explore the role of private transfers (gifts) as an informal insurance mechanism to smooth consumption in the face of an adverse covariate shock caused by the flooding. The level of transfers made is shown to be altruistically calibrated to the severity of flood exposure. As an indicator of the economic importance of such gifts, the amount of transfers received is shown to significantly contribute to reducing household consumption variability. We discuss the policy implications of our findings in a developing country context.

Type
Research Article
Information
Environment and Development Economics , Volume 14 , Issue 2 , April 2009 , pp. 187 - 210
Copyright
Copyright © Cambridge University Press 2008

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