Disentangling the Happiness Effects of Natural Disasters: The Mitigating Effects of Charitable Donations

In happiness economics the negative effect of natural disasters on subjective well-being (SWB) tends to be underestimated by ignoring the fact that disasters also induce charitable donations which are positively related to SWB. Using data from recent Japa-nese Government Surveys on the triple disaster of March 11 (3-11) our analysis con-firms this. We find that as much as one third of the negative effects of 3-11 on SWB are mitigated by the positive effects of charitable donations. A spatial analysis further reveals that the mitigating effects of charitable donations are especially prominent in medium to close distance to the disaster area.