Dynamics in the Returns to Capital: Natural Experimental Evidence from Indonesia

This paper uses the 2004 Indian Ocean tsunami as a natural experiment to estimate returns to capital over time. With a sample of surviving fishermen who lost their boats and received aid boats, we find that more productive fishermen before the disaster retained their productive edge ex-post, control...

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Bibliographic Details
Published inThe Journal of development studies Vol. 58; no. 2; pp. 388 - 409
Main Author Wong, Po Yin
Format Journal Article
LanguageEnglish
Published England Routledge 01.02.2022
Subjects
aid
natural disasters
productivity
returns to capital
natural disasters
returns to capital
productivity
aid
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Summary:This paper uses the 2004 Indian Ocean tsunami as a natural experiment to estimate returns to capital over time. With a sample of surviving fishermen who lost their boats and received aid boats, we find that more productive fishermen before the disaster retained their productive edge ex-post, controlling for boat quality and fishing conditions. Returns to innate ability, measured by ex-ante productivity, became more important over time; while returns to physical capital became less important. These findings highlight the importance of innate ability in explaining long-run productivity.
Bibliography:ObjectType-Article-1
SourceType-Scholarly Journals-1
ObjectType-Feature-2
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ISSN:0022-0388
1743-9140
DOI:10.1080/00220388.2021.2003334