While the impacts of natural disasters have been widely documented, their effects on the Big Five personality traits have not yet been explored. This gap in the literature is significant, given the growing concern over the consequences of climate change-related disasters and the well-established relationship between the Big Five personality traits and various life outcomes. This study addresses this gap by presenting a novel investigation into the causal effects of natural disaster-induced home damage on the Big Five personality traits.
Using a time-varying, plausibly exogenous measure of local cyclone exposure as an instrument within an individual fixed effects instrumental variable framework, we find that weather-related home damage significantly reduces Conscientiousness and Emotional Stability, while increasing Openness to Experience. These effects are highly heterogeneous: significant impacts emerge only in quantile regression models, with individuals at the lower end of the Conscientiousness and Emotional Stability distributions more adversely affected, and those at the upper end of the Openness distribution exhibiting greater increases. Furthermore, our findings suggest that weather-related home damage may indirectly reduce earnings by altering personality traits in ways associated with lower income—effects that are not only statistically significant but also substantial in magnitude and economically meaningful. These personality changes may correspond to income losses of up to 5%, with socioeconomically disadvantaged individuals being most severely affected.
These findings carry both methodological and policy implications. Methodologically, the findings highlight the importance of addressing the endogeneity of self-reported home damage and underscore the value of examining distributional effects beyond average treatment effects. From a policy perspective, the novel finding that natural disaster-induced home damage can causally alter personality traits in ways associated with lower income highlights the need for targeted support for affected individuals. The disproportionate impact on already disadvantaged populations further underscores the importance of resilience-building interventions and tailored assistance to the most severely affected groups, in order to mitigate long-term socioeconomic harm and reduce inequality.