The financial burden of climate disasters on household's health expenditure: evidence from Australia
Abstract
IntroductionClimate change is increasing the frequency and intensity of natural disasters. While a growing literature documents their effects on psychological well-being, less is known about their implications for household medical expenditure. This study examines the relationship between direct exposure to weather-related disasters and out-of-pocket pharmaceutical expenditure.MethodsWe use nationally representative longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey covering 2009-2021. Individual fixed-effects models account for time-invariant unobserved heterogeneity and control for a rich set of socioeconomic and demographic characteristics.ResultsExposure to weather-related disasters is associated with significantly higher out-of-pocket pharmaceutical expenditure. This association is concentrated among individuals without private health insurance. An analysis of potential transmission mechanisms further shows that disaster exposure increases the likelihood of reporting several physical and mental health conditions.DiscussionThe findings suggest that the economic costs of climate-related disasters extend beyond physical damage and public reconstruction spending, affecting household welfare through higher pharmaceutical expenditure. The concentration of this burden among individuals without private health insurance highlights the potential role of insurance coverage in shaping the financial consequences of climate-related shocks.
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BibTeX
@article{betancourtodio2026financial,
title = {{The financial burden of climate disasters on household's health expenditure: evidence from Australia}},
author = {Alejandro Betancourt-Odio and Marlene Fonseca and Santiago Budría},
journal = {Frontiers in Public Health},
year = {2026},
month = nov,
doi = {10.3389/fpubh.2026.1946887},
url = {https://www.frontiersin.org/articles/10.3389/fpubh.2026.1946887},
note = {CC BY 4.0},
}
RIS
TY - JOUR
TI - The financial burden of climate disasters on household's health expenditure: evidence from Australia
AU - Alejandro Betancourt-Odio
AU - Marlene Fonseca
AU - Santiago Budría
PY - 2026
DA - 2026/11/06
JO - Frontiers in Public Health
DO - 10.3389/fpubh.2026.1946887
UR - https://www.frontiersin.org/articles/10.3389/fpubh.2026.1946887
AB - IntroductionClimate change is increasing the frequency and intensity of natural disasters. While a growing literature documents their effects on psychological well-being, less is known about their implications for household medical expenditure. This study examines the relationship between direct exposure to weather-related disasters and out-of-pocket pharmaceutical expenditure.MethodsWe use nationally representative longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey covering 2009-2021. Individual fixed-effects models account for time-invariant unobserved heterogeneity and control for a rich set of socioeconomic and demographic characteristics.ResultsExposure to weather-related disasters is associated with significantly higher out-of-pocket pharmaceutical expenditure. This association is concentrated among individuals without private health insurance. An analysis of potential transmission mechanisms further shows that disaster exposure increases the likelihood of reporting several physical and mental health conditions.DiscussionThe findings suggest that the economic costs of climate-related disasters extend beyond physical damage and public reconstruction spending, affecting household welfare through higher pharmaceutical expenditure. The concentration of this burden among individuals without private health insurance highlights the potential role of insurance coverage in shaping the financial consequences of climate-related shocks.
SN - 2296-2565
ER -