Skip to main content

Thank you for visiting You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

  • Article
  • Published:

Socio-economic consequences of post-disaster reconstruction in hazard-exposed areas


With coastal populations growing and sea levels rising, reconstruction decisions after coastal disasters are increasingly consequential determinants of future societal vulnerability and thus the sustainability of development. The humanitarian sector tends to favour rebuilding in-place to avoid the social disruptions of mass relocation, yet evidence on what affected people want is mixed. Using the case of post-tsunami Banda Aceh, Indonesia, we investigate whether a policy to rebuild in-place in the disaster-affected area suits an urban population that was previously unaware of the hazard. We show that following the tsunami, a substantial proportion of the population prefers to live farther from the coast. This has caused a new price premium for inland properties and socio-economic sorting of poorer households into coastal areas. These findings show that offering reconstruction aid predominantly within a hazard-exposed area can inadvertently transfer disaster risk to the poor.

This is a preview of subscription content, access via your institution

Access options

Buy this article

Prices may be subject to local taxes which are calculated during checkout

Fig. 1: Risk preferences and socio-economic status of those who moved and those who did not.
Fig. 2: Property prices.
Fig. 3: Estimates of poverty rates.

Similar content being viewed by others


  1. Rodriguez-Oreggia, E., de la Fuente, A., de la Torre, R. & Moreno, H. A. Natural disasters, human development and poverty at the municipal level in Mexico. J. Dev. Stud. 49, 442–455 (2013).

    Article  Google Scholar 

  2. Anttila-Hughes, J. K. & Hsiang, S. M. Destruction, Disinvestment, and Death: Economic and Human Losses Following Environmental Disaster (2013);

  3. Kousky, C. Informing climate adaptation: a review of the economic costs of natural disasters. Energy Econ. 46, 576–592 (2014).

    Article  Google Scholar 

  4. Hsiang, S. M. & Jina, A. S. The Causal Effect of Environmental Catastrophe on Long-Run Economic Growth: Evidence from 6,700 Cyclones Working Paper No. 20352 (NBER, 2014).

  5. Skidmore, M. & Toya, H. Do natural disasters promote long-term growth? Econ. Inq. 40, 664–687 (2002).

    Article  Google Scholar 

  6. Carter, M. R., Little, P. D. & Mogues, T. Poverty traps and natural disasters in Ethiopia and Honduras. World Dev. 35, 835–856 (2007).

    Article  Google Scholar 

  7. Global Assessment Report on Disaster Risk Reduction 2015 (UN Office for Disaster Risk Reduction, 2015).

  8. Sendai Framework for Disaster Risk Reduction 2015–2030 (UN Office for Disaster Risk Reduction, 2015).

  9. Cernea, M. The risks and reconstruction model for resettling displaced populations. World Dev. 25, 1569–1587 (1997).

    Article  Google Scholar 

  10. Oliver-Smith, A. Successes and failures in post-disaster resettlement. Disasters 15, 12–23 (1991).

    Article  CAS  Google Scholar 

  11. Patt, A. & Schroter, D. Perceptions of climate risk in Mozambique: implications for the success of adaptation strategies. Glob. Environ. Change 18, 458–467 (2008).

    Article  Google Scholar 

  12. Boano, C. Housing anxiety and multiple geographies in post-tsunami Sri Lanka. Disasters 33, 762–785 (2009).

    Article  Google Scholar 

  13. Ingram, J. C., Franco, G., Rio, C. Rdel & Khazai, B. Post-disaster recovery dilemmas: challenges in balancing short-term and long-term needs for vulnerability reduction. Environ. Sci. Policy 9, 607–613 (2006).

    Article  Google Scholar 

  14. Land and Natural Disasters: Guidance for Practitioners (UN-HABITAT, Nairobi, 2010).

  15. Jha, A. K., Barenstein, J. D., Phelps, P. M., Pittet, D. & Sena, S. Safer Homes, Stronger Communities: A Handbook for Reconstructing After Natural Disasters (World Bank, Washington DC, 2010).

  16. Piguet, E., Pecoud, A. & de Guchteneire, P. Migration and Climate Change. (Cambridge Univ. Press, Cambridge, 2011).

    Google Scholar 

  17. Hunter, L. M., Luna, J. K. & Norton, R. M. Environmental dimensions of migration. Annu. Rev. Sociol. 41, 377–397 (2015).

    Article  Google Scholar 

  18. Gray, C. L. & Mueller, V. Natural disasters and population mobility in Bangladesh. Proc. Natl Acad. Sci. USA 109, 6000–6005 (2012).

    Article  CAS  Google Scholar 

  19. Bohra-Mishra, P., Oppenheimer, M. & Hsiang, S. M. Nonlinear permanent migration response to climatic variations but minimal response to disasters. Proc. Natl Acad. Sci. USA 111, 9780–9785 (2014).

    Article  CAS  Google Scholar 

  20. Cronin, V. & Guthrie, P. Community-led resettlement: From a flood-affected slum to a new society in Pune, India. Environ. Hazards 10, 310–326 (2011).

    Article  Google Scholar 

  21. Barenstein, J. D. & Rojas Rivas, B. M. in Post-Disaster Reconstruction and Change: Communities’ Perspectives (eds. Barenstein, J. D. & Leeman, E.) 300–323 (CRC, Boca Raton, 2012).

  22. de Vries, D. H. & Fraser, J. C. Citizenship rights and voluntary decision making in post-disaster U.S. floodplain buyout mitigation programs. Int. J. Mass Emerg. Disasters 30, 1–33 (2012).

    Google Scholar 

  23. Binder, S. B., Baker, C. K. & Barile, J. P. Rebuild or relocate? Resilience and postdisaster decision-making after Hurricane Sandy. Am. J. Commun. Psychol. 56, 180–196 (2015).

    Article  Google Scholar 

  24. Adams, H. Why populations persist: mobility, place attachment and climate change. Popul. Environ. 37, 429–448 (2016).

    Article  Google Scholar 

  25. Brookshire, D. S., Thayer, M. A., Tschirhart, J. & Schulze, W. D. A test of the expected utility model: evidence from earthquake risks. J. Polit. Econ. 93, 369–389 (1985).

    Article  Google Scholar 

  26. Bernknopf, R. L., Brookshire, D. S. & Thayer, M. A. Earthquake and volcano hazard notices: an economic evaluation of changes in risk perceptions. J. Environ. Econ. Manage. 18, 35–49 (1990).

    Article  Google Scholar 

  27. Naoi, M., Seko, M. & Sumita, K. Earthquake risk and housing prices in Japan: evidence before and after massive earthquakes. Reg. Sci. Urban Econ. 39, 658–669 (2009).

    Article  Google Scholar 

  28. Onder, Z., Dokmeci, V. & Keskin, B. The impact of public perception of earthquake risk on Istanbul’s housing market. J. Real Estate Lit 12, 181–104 (2004).

    Google Scholar 

  29. Carbone, J. C., Hallstrom, D. G. & Smith, V. K. Can natural experiments measure behavioral responses to environmental risks? Environ. Resour. Econ. 33, 273–297 (2006).

    Article  Google Scholar 

  30. Bin, O. & Landry, C. E. Changes in implicit flood risk premiums: Empirical evidence from the housing market. J. Environ. Econ. Manage. 65, 361–376 (2013).

    Article  Google Scholar 

  31. Smith, V. K., Carbone, J. C., Pope, J. C., Hallstrom, D. G. & Darden, M. E. Adjusting to natural disasters. J. Risk Uncertainty 33, 37–54 (2006).

    Article  Google Scholar 

  32. Lall, S. V. & Deichmann, U. Density and disasters: economics of urban hazard risk. World Bank Res. Obs. 27, 74–105 (2010).

    Article  Google Scholar 

  33. Chan, N. W. Choice and constraints in floodplain occupation: the influence of structural factors on residential location in peninsular Malaysia. Disasters 19, 287–307 (1995).

    Article  CAS  Google Scholar 

  34. Wisner, B., Blaikie, P., Cannon, T. & Davis, I. At Risk: Natural Hazards, People’s Vulnerability and Disasters (Routledge, London/New York, 2003).

    Google Scholar 

  35. Bankoff, G. Cultures of Disaster: Society and Natural Hazard in the Philippines (Routledge, London/New York, 2003).

    Book  Google Scholar 

  36. Black, R., Arnell, N. W., Adger, W. N., Thomas, D. & Geddes, A. Migration, immobility and displacement outcomes following extreme events. Environ. Sci. Policy 27, S32–S43 (2013).

    Article  Google Scholar 

  37. Fussell, E. The long-term recovery of New Orleans’ population After Hurricane Katrina. Am. Behav. Sci. 59, 1231–1245 (2015).

    Article  Google Scholar 

  38. Lavigne, F. et al. Reconstruction of tsunami inland propagation on December 26, 2004 in Banda Aceh, Indonesia, through field investigations. Pure Appl. Geophys. 166, 259–281 (2009).

    Article  Google Scholar 

  39. IPCC Climate Change 2013: The Physical Science Basis (eds. Stocker, T. F. et al.) (Cambridge Univ. Press, Cambridge, 2013).

  40. Frankenberg, E., Gillespie, T., Preston, S., Sikoki, B. & Thomas, D. Mortality, the family and the Indian Ocean Tsunami. Econ. J. 121, 162–182 (2011).

    Article  Google Scholar 

  41. Finance: The Seven Keys to Effective Aid Management (The Executing Agency of Rehabilitation and Reconstruction for Aceh and Nias (BRR NAD-NIAS), Banda Aceh, 2009).

  42. Master Plan for Rehabilitation and Reconstruction for the Regions and People of the Province of Nanggroe Aceh Darussalam and Nias Islands of the Province of North Sumatra (Ministry of National Development Planning (BAPPENAS), Jakarta, 2005).

  43. I threw out the Aceh Master Plan. Tempo 26–27 (25 December 2014).

  44. McCaughey, J. W., Mundir, I., Daly, P., Mahdi, S. & Patt, A. Trust and distrust of tsunami vertical evacuation buildings: extending protection motivation theory to examine choices under social influence. Int. J. Disaster Risk Reduct. 24, 462–473 (2017).

    Article  Google Scholar 

  45. The Study on the Urgent Rehabilitation and Reconstruction Support Program for Aceh Province and Affected Areas in North Sumatra (JICA, BAPPENAS & Provincial Government of Nanggroe Aceh Darussalam, Tokyo and Banda Aceh, 2005).

  46. Consumer Price Index (World Bank, accessed 4 April 2017);

  47. NIST/SEMATECH e-Handbook of Statistical Methods Ch. (NIST/SEMATECH);

  48. R Core Team R: A Language and Environment for Statistical Computing (R Foundation for Statistical Computing, 2013).

Download references


This research is supported by the National Research Foundation Singapore and the Singapore Ministry of Education under the Research Centres of Excellence initiative. This work was funded by the Earth Observatory of Singapore (EOS) and is EOS Contribution Number 132. The International Centre for Aceh and Indian Ocean Studies facilitated this research in collaboration with Syiah Kuala University. Nizamuddin, Ardiansyah and M. Affan carried out geospatial analyses. Hayatullah, N. Anwar, Z. Ak, A. Uzia, C. Murnita, F. Nailufar, Fitriani, I. Fitria, Israyani, Jihan, Safrina and S. Tahir helped to refine research instruments and carried out field research. N. Elviera, I. Fitria, J. Yong, R. Zahara, S. Novita and D. Hundlani assisted with data management and verification. E. Maida, C. Dian Fitri and I. Arisandy provided operational support. P. Adamek provided comments on the manuscript.

Author information

Authors and Affiliations



J.W.M., I.M., P.D. and A.P. designed the research. S.M. designed the sampling strategy. J.W.M. and I.M. carried out the research and analysed the data. All authors contributed to writing the manuscript.

Corresponding author

Correspondence to Jamie W. McCaughey.

Ethics declarations

Competing interests

The authors declare no competing financial interests.

Additional information

Publisher’s note: Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Electronic supplementary material

Supplementary Information

Supplementary Information Notes on methods and additional figures and tables

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

McCaughey, J.W., Daly, P., Mundir, I. et al. Socio-economic consequences of post-disaster reconstruction in hazard-exposed areas. Nat Sustain 1, 38–43 (2018).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:

This article is cited by


Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing