10 Second, there appears extensive flooding in the Mekong River Delta region almost every year. Third, 2005 was likely the worst year for riverine and coastal flooding. Fourth, riverine flooding was further observed on and off in the other regions, in 2002 and 2005 in the northern uplands, in 2003 and 2005 in the Red River Delta region, and in all years, but scattered around the region in the Southcentral Coastal. Consistent with the events during 2001‐2006, the historical record shows that riverine floods happen most frequently in the Mekong and Red River Delta (Figure 7).

# _Cyclone maps_

Tropical storms approach Vietnam from the east. They typically arrive during the Southeast and Northeast monsoon (Christiaensen et al., 2009), with 90 percent of them occurring between June and November, and almost half of them coming ashore in the northern part of the country. To generate annual cyclone maps, a GIS dataset of areas affected by hurricane force winds was developed from the UNEP/GRID‐Europe (2007a, 2007b) tropical cyclones databases. In particular, the storm track and wind speed data were used to create symmetric polygons about each path, based on the algorithm by Klotzbach and Gray (no date).<sup>21</sup> The areas exposed to hurricane force wind (of 120 km/hour) in Vietnam between 2001 and 2006 are in Figure 8, and the frequency with which they have been exposed between 1980 and 2006 is depicted in Figure 9. During the first three years, the tropical cyclones did not affect the land much, though the impact was larger in 2004 to 2006, with two separate cyclones with hurricane force winds hitting the country in 2006. The coastal areas in the Northcentral coast and the Northeastern Uplands appear most exposed to cyclones, with hurricane force winds occurring once every five years. Visual comparison of Figures 4 and 8 suggests that heavy rainfall was caused by the cyclones in some cases, though not in all. There appears less correlation between coastal and riverine flooding and cyclones. Not only do the localized and riverine flood variables not capture the wind damage associated with cyclones, they also overlap only partially with the cyclone paths, underscoring the need to use an additional measure to reflect damages associated with cyclones.

# **3 Identifying Welfare Effects from Natural Disasters**

The effects of natural disasters and other shocks on household welfare are commonly assessed by augmenting a standard reduced form consumption regression with explicit measures of the disasters themselves: ln ���� ������ �������� ������������������ (1) where ���� is a measure of consumption for a household _i_ in cluster _c_ at time t, _X_ represent a series of household, cluster and regional characteristics that determine the level of consumption, _ND_ are (stochastic) measures of (covariate) natural disaster k in cluster c at time t, ε is a residual term.

> 21 The storm track dataset (UNEP/GRID‐Europe 2007) had some missing wind speeds.  These were filled in using values obtained by regressing known winds speeds on pressure, pressure squared, and dummy variables for hurricane monitoring centres.  The R‐squared was above 0.91, giving confidence in the predictive power of the data and the regression.