Natural disasters, home damage, and the eroding locus of control

The catastrophic consequences of natural disasters on social and economic systems are extensively documented, yet their influence on individuals' sense of control over their life outcomes remains unexplored. This study pioneers an investigation into the causal effects of natural disaster-related home damage on the locus of control. Utilizing Australian longitudinal data, we implement an individual fixed effects instrumental variables approach leveraging time-varying, exogenous exposure to local natural disasters to address confounding factors. Our findings provide compelling evidence: natural disaster-induced home damage significantly diminishes individuals' perception of control, especially for those at the lower end of the locus of control distribution. The effect is disproportionately heightened for women, older individuals, wealthier households, those without prior insurance, urban or inland residents, and those in historically cyclone-free regions. This newfound understanding offers opportunities for developing targeted interventions and support mechanisms tailored to address the specific needs and vulnerabilities of individuals following natural disasters.