| Abstract: |
We evaluate the effects of the tsunami shock on several monetary and
non-monetary wellbeing indicators of 305 randomly selected MFI borrowers in
Southern Sri Lanka and find four main results. First, psychological wellbeing
indicators vary more than material ones when scaled on their own pre-tsunami
standard deviations. Second, people who had no economic damages did not report
any significant psychological loss (contrary to the “solidarity effect” found
by some authors after the hurricane Katrina in 2005). Third, although the
process is not complete yet, most of the material and psychological wellbeing
indicators of the damaged people are recovering to their own pre-tsunami
levels and converging to those of non-damaged ones after MFI refinancing.
Fourth, we find a positive impact of the amount of MFI refinancing scaled by
the post-tsunami income on real income growth. On the contrary, governmental
subsidies, donations and grants do not have any positive impact on the
recovery. |