Economic Consequences of the 2004 Tsunami for Households and Individuals in Indonesia

Elizabeth Frankenberg, Duke University
Peter Katz, University of California, Los Angeles
Bondan Sikoki, SurveyMETER
Duncan Thomas, Duke University

On December 26, 2004, the Sumatra-Andaman earthquake occurred. The resulting tsunami wreaked havoc on 10 countries and some 4,500 kilometers of coastline throughout the region. Indonesia was the country hardest hit. Damage to public infrastructure, productive assets and private property is estimated at a value of $U.S. 4.5 billion— 97% of Aceh’s GDP. This paper examines the economic consequences, broadly interpreted, for households in the Indonesian provinces of Aceh and North Sumatra. We analyze a unique data set collected as part of the Study of the Tsunami Aftermath and Recovery (STAR). STAR is a multiwave longitudinal study that draws on a subset of respondents to the 2004 National Socioeconomic Survey. Preliminary results point to substantial changes at the household level with respect to composition (in the heavily damaged zone, the household head was killed in some 25% of households) and with respect to asset positions, which declined in value by millions of Rupiah.