A longitudinal study of the impact of disasters on individual wellbeing

Abstract

Disasters disrupt people’s lives and continue to adversely impact them beyond the immediate aftermath. Whilst the literature establishes that disasters affect wellbeing through multiple channels, our paper contributes by examining the persistence of these effects over subsequent years and testing whether financial impacts serve as a key explanatory mechanism. Using rich, longitudinal data from Australia’s HILDA Survey, we employ mediation analysis to understand the temporal patterns of disaster impacts and individual recovery by focusing on their wellbeing levels measured by life satisfaction, social connectedness, and happiness. Our fixed-effects regression analysis reveals that disasters reduce the life satisfaction and happiness of those affected, with adverse effects extending well beyond the year of occurrence. These effects are explained by lower financial satisfaction and remain consistent across specifications accounting for multiple disasters. We also find a positive impact of disasters on the social connectedness of respondents. These findings support the call for sustained support services and wellbeing assessments of disaster-affected communities. • Disasters reduce individual wellbeing of those affected measured by life satisfaction and happiness. • The adverse effect of disasters may extend beyond the year of occurrence. • Lower financial satisfaction caused by disasters leads to lower wellbeing.