Working paper

What explains the disaster preparedness of micro-enterprises?

Examining socio-psychological characteristics and information provision

Worldwide, enterprises are hit by disasters such as cyclones and floods. Despite being impacted negatively, most enterprises do not prepare for future disasters. This study aims at understanding the determinants of enterprises’ disaster preparedness.

It first examines whether specific socio-psychological characteristics of entrepreneurs are associated with their enterprises’ disaster preparedness. The second step includes an experiment providing enterprises with information about six specific and easy-to-implement measures of disaster preparedness. This experiment aims to understand if better information increases entrepreneurs’ attitudes towards, and de facto, disaster preparedness.

For this purpose, we use a panel dataset of mostly informal Mozambican micro-enterprises from 2022 and run standard fixed effects regressions and randomized controlled trial impact evaluations. First, we find that knowledge about climate change, descriptive norms, and egoistic values are associated with the disaster preparedness of enterprises. Second, providing information about disaster preparedness measures neither changes attitudes towards nor de facto disaster preparedness. 

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