Association for Public Policy Analysis & Management

On December 26, 2004 a 9.2 earthquake with an epicenter just off the west coast of the Indonesian island of Sumatra spawned a tsunami that affected countries around the entire Indian Ocean. Aceh, on the northern end of Sumatra, was hardest hit. It is estimated that five percent of the population was killed, and that about 15 percent was displaced because of the massive destruction to housing, roads and infrastructure. Damage was estimated to exceed US$4.5 billion in 2004 dollars.

The scope and complexity of the program of humanitarian assistance and reconstruction that followed the tsunami was unprecedented in any developing country setting. An explicit goal of the reconstruction was to “Build back better” and it is estimated that over $7 billion (2004 dollars) was spent on reconstruction.

Using data from the Study of the Tsunami Aftermath and Recovery (STAR), a large-scale population-representative longitudinal survey, we address the complex interlinkages among post-disaster relocation decisions, receipt of housing assistance, and the evolution of well-being.

First, we identify the characteristics associated with people’s decisions to leave their homes and pre-disaster communities. We show that home destruction plays a significant role in the decision to leave the pre-tsunami residence, regardless of the level of exposure to physical damage of the community. This pattern is particularly true for those from extensively damaged areas. Conversely, in areas with medium/low physical exposure to the tsunami, individual and household level characteristics play a larger role in explaining decisions to leave the pre-tsunami community. These differences suggest the need for a broader definition of displacement or relocation in this post-tsunami period, which should account for community and individual vulnerability to damage, and also individual and household characteristics.

Second, we focus on housing aid receipt. We show that regardless of the level of community exposure to tsunami damage, house destruction is perhaps the most important determinant of the receipt of housing assistance. Those who remained in their pre-tsunami community in high exposure areas particularly benefited from housing aid.

Third, we examine the determinants of the evolution of well-being just after the tsunami, between the first and second year after the tsunami, and between the first and fifth year after the tsunami. Importantly, receipt of housing aid is associated with greater improvements in well-being between the first and second years after the tsunami for those from heavily damaged areas, and particularly so for those who stayed in their pre-tsunami communities.

The results presented in this paper contribute to our understanding of the complexity of the relationships between determinants of post-disaster relocations, aid for housing reconstruction, and individual well-being. Results highlight the importance of housing aid in the recovery process of survivors by showing how relocation, in combination with aid, can significantly improve recovery of populations affected by a large disaster.