Land, housing and work: the household issues in the Post-Disaster. Market reactions and State intervention in the Regions left behind

Disasters caused by natural phenomena represent a long-standing problem, which increases dramatically in frequency and cost in recent years. The economies are affected as a whole, but the most affected category is households. In an area prone to earthquakes, where risk exposure cannot be avoided, reducing the vulnerability of buildings has the most important role. Sometimes, for various reasons, prevention is not enough and a seismic event leads to catastrophic destruction of human settlements. There is no consensus in the literature on how to deal with a socio-natural disaster. The main parameters for assessing the territorial recovery are the local GDP and the employment rate, useful but not sufficient to evaluate the labour conditions. Decreases in house prices are seen as a private problem and seismic risk models are sometimes obsolete or imprudent. The theory has often neglected to analyse the micro implication of reconstruction subsidies and there are shortcomings in the various nuances that state intervention can have on post-disaster markets. The purpose of this thesis is to define the work, housing and vulnerability of the land as the three pillars on which to intervene in a post-disaster area, as well as for other territories that are still safe but risky and in decline, implicitly suggesting these as new parameters for local development. The thesis is a collection of papers, structured in three articles that analyse the dimensions of work, housing and seismic risk from a global perspective to a local one. The first chapter is a comparison between Ecuador, Chile and Italy regarding the regional post-earthquake labour market. The three short-term workforce surveys are compared, finding the different pre-shock determinants of having a job, an increase in wages or in working hours after the earthquake. Salary distributions are also compared in quantile estimations, including which segments of the population are losing or gaining purchasing power after the disaster. The results show that women and uneducated people suffer most from the state of emergency and, surprisingly, construction workers are not the ones who are gaining from the disaster. The second chapter explores the impact on housing prices of the double shock caused by the 2009 L’Aquila earthquake in Italy and the subsequent reconstruction process financed with public funds. The research adopts a difference in difference approach, using as controls for rural municipalities a Mahalanobis Distance Matching and a border control and a synthetic parametric control for the city of L’Aquila. The results show that the relationship between subsidies for reconstruction and housing prices is positive and quadratic. For rural municipalities that do not depopulate, the public spending more than absorb the shock of the catastrophe, with several territorial disparities. The third chapter focuses on the local implication of risk perception on housing prices. Using only the municipality of L’Aquila as a case study, every single post-disaster housing transaction is analysed in a hedonic model. Each housing price is then broken down according to its vulnerability to the land, seismic damage and reconstruction funds. The results show an increasingly higher value for the non-reconstructed houses and for the low soil vulnerability. Building damage and all neighbourhood-related variables are inconsistent if adequate to the money spent on private reconstruction, the latter providing us ideas for a general positive confidence of homeowners in public-led reconstruction. Summarizing the results of each document, the state intervention can absorb much of the seismic shock but it is extremely expensive and the benefits are always strongly polarized within the local communities, increasing inequalities and causing expulsions from the original territories, in the short run as well as in the long term. Earthquakes like any other disaster can be an opportunity to regenerate a lagging territory only if the processes are well managed and well monitored. The best option, both in terms of public expenditure and household wealth, is always to prevent any possible risk and create solid endogenous growth.