Heterogeneous effects of cyclones on households’ welfare: Evidence from Madagascar

Abstract

Madagascar is among the most cyclone-prone countries in the world, with frequent and severe weather events posing significant risks to household welfare. This study investigates the impacts of cyclones on household dynamics in Madagascar, with a specific focus on expenditures, food security, and poverty. Employing a comprehensive analytical approach that integrates difference-in-differences, propensity score matching, and proxy parallel trend testing, we exploit a unique dataset derived from two rounds of Madagascar's nationally representative household survey, conducted in 2020 and 2022 covering over 19,000 households across cyclone-affected and unaffected regions. Affected households experienced a substantial 19 % reduction in household per capita expenditure, leading to an 11 % higher likelihood of falling below the poverty line. Food insecurity escalated, evident in a drop of 205 calories per person in daily consumption. Remarkably, households strategically allocated resources towards food expenses against non-food expenditures during crises, reflecting their prioritization in savings behaviour. Using windspeed, our analysis highlights notable spatial heterogeneity between different cyclones and within the same cyclone, where impact magnitude corresponds to cyclone intensity. These findings underscore the urgent need for international collaboration and national action to mitigate the adverse effects of cyclones. The international community should scale up disaster relief funding and invest in resilient infrastructure and early warning systems to honour the commitments made at the COP27 conference to support vulnerable nations like Madagascar. Concurrently, the Government of Madagascar should prioritize expanding social safety nets, improving cyclone preparedness, and targeting aid to households affected by cyclones to promote recovery and resilience.