The Impact of Compound Hot-and-Dry Events on Household Well-being

The socioeconomic impacts of compound extremes are sudden, severe, and multidimensional. Without precautionary measures, social and economic safety nets including community support and insurance, the negative effects of a single, short-run shock on households can extend to the long-run and persist over many years. Studies on the impacts of compound extremes have focused on objective measurements of well-being, including income, health, education; with much fewer studies on subjective well-being. Looking into subjective well-being takes an evaluative perspective on the quality of life, wherein the recovery from a disaster takes more than just the return to employment, for instance. Previous studies have shown that subjective well-being is also a good predictor of life expectancy, productivity, educational performance, and voting behaviour. Using econometric methods on sub-national, household panel data from the EU Survey of Income and Living Conditions (EU-SILC) and a composite index for the simultaneous occurrence of droughts and heatwaves, I quantify and compare the impacts of compound dry-and-hot events (CDHE) in Europe on objective and subjective measurements of well-being. The results of this study provide new information on the magnitude, as well as, the persistence of effects from CDHE, based on both the traditional income-based measurements versus the self-reported measurements of well-being.