Financial choice of disaster affected Filipinos
Date
2018-12
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Abstract
Throughout the years, the Philippines showed vulnerability to natural disasters because of
its geographical location. Literatures showed that natural disasters affect individual decisions at
several points in time. Simultaneously, low financial literacy and low financial inclusion rate
among Filipinos served as a huge problem for the Philippine policymakers. This study tested the
effect of environmental damages to Filipinos with their financial decisions in the basis of
intertemporal choice. This study decomposed financial choice into the decision to avail of an
account and exact amount of transacted financial service. The models are implemented through
the usage of clustered standard errors and multilevel mixed effects. Results showed that natural
disasters mainly affect the volume of financial service that Filipinos, both at the lag and current
effects. On the other hand, the factors affecting the decision to avail of an account were purely
based on the Filipinos’ sociodemographic characteristics. Concludingly, the researchers suggested
that the financial inclusion initiatives of the government shall be implemented simultaneously with
the strengthening of the disaster resilience programs of the country.
Description
Keywords
disaster risk, financial inclusion, intertemporal choice, time preference