Natural disasters and their long-term effect on happiness: the case of the great Hanshin-Awaji earthquake.

The great Hanshin-Awaji (Kobe) earthquake, which occurred in 1995, resulted in tremendous economic damage to the city of Kobe. Using individual-level data of Japan during the period 2000–08, I investigated the long-term impact of the earthquake on the happiness of surviving victims. After controlling for individual characteristics and characteristics of residential areas, the following key findings were obtained: (1) victims were more likely to feel happy than non-victims; (2) this tendency disappeared with time. This suggests that the aspiration level declined following the experience of the devastating event, which led victims to feel happier. However, victims adapt to the new circumstances with time.