caa a22 4500 445864168 CHVBK 20180317145452.0 cr unu---uuuuu 170323e20111201xx s 000 0 eng 10.1007/s11150-011-9124-7 doi (NATIONALLICENCE)springer-10.1007/s11150-011-9124-7 Changes in durable stocks, portfolio allocation, and consumption expenditure in the aftermath of the Kobe earthquake [Elektronische Daten] [Yasuyuki Sawada, Satoshi Shimizutani] To understand the household recovery process from unexpected serious damage caused by a natural disaster, we analyze household data from the Kobe earthquake in 1995. We address three questions—how damaged stocks of durable wealth are reinvested, how an ex post portfolio of borrowing or dissaving is reallocated to diversify the asset shocks caused by the disaster, and how formal and informal consumption insurance mechanisms are effective for amending home damage—all of which have been largely unanswered. We obtain three findings. First, people respond to negative income changes and housing damage by reinvesting damaged wealth. Second, households borrow extensively to amend the large housing damage caused by the earthquake. However, they dissave only for minor household asset damage. Third, consumption smoothing is not achieved for nondurable goods that are significantly affected by negative income changes and household asset damage. These findings suggest that asset shocks caused by a large natural disaster are not sufficiently diversified for households, indicating a large gap in designing effective insurance mechanisms. Springer Science+Business Media, LLC, 2011 Natural disasters nationallicence Rebuilding durable stocks nationallicence Consumption risk-sharing nationallicence Portfolio allocation nationallicence Earthquake nationallicence Nonseparability nationallicence Sawada Yasuyuki Faculty of Economics, University of Tokyo, 7-3-1 Hongo, 113-0033, Bunkyo-ku, Tokyo, Japan aut Shimizutani Satoshi Institute for International Policy Studies (IIPS), Toranomon 30 Mori Bldg., 6F Toranomon, 3-2-2 Minato-ku, 105-0001, Tokyo, Japan aut Review of Economics of the Household Springer US; http://www.springer-ny.com 9/4(2011-12-01), 429-443 1569-5239 9:4<429 2011 9 11150 https://doi.org/10.1007/s11150-011-9124-7 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s11150-011-9124-7 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Sawada Yasuyuki Faculty of Economics, University of Tokyo, 7-3-1 Hongo, 113-0033, Bunkyo-ku, Tokyo, Japan aut NATIONALLICENCE 700 1- Shimizutani Satoshi Institute for International Policy Studies (IIPS), Toranomon 30 Mori Bldg., 6F Toranomon, 3-2-2 Minato-ku, 105-0001, Tokyo, Japan aut NATIONALLICENCE 773 0- Review of Economics of the Household Springer US; http://www.springer-ny.com 9/4(2011-12-01), 429-443 1569-5239 9:4<429 2011 9 11150 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer