23 disasters whose effects regularly permeate the economy through product (food prices) and factor (labor) markets.

The econometric results suggest that households in Vietnam largely manage to cope with the immediate effects of drought events, through irrigation, though that the frequent occurrence of droughts erodes their capacity to cope with them, resulting in substantial welfare loss especially among households in drought prone areas closer to the urban centers, where disaster relief is less pronounced. Localized floods exert important welfare losses, on average an estimated 7 percent, though much of that loss appears to be recuperated through capital replacement in the subsequent year, at least among those who are only occasionally affected by such floods. Those who are frequently affected suffer more, though the long run effects from frequent exposure to localized floods are substantially less than those from frequent exposure to droughts, partly due to a responsive relief system in the more urban areas that are frequently affected. Riverine floods cause substantial welfare damage (23 percent) in the short run, though less so among households who are frequently exposed. Not only do they tend to be much better served by disaster relief, especially when close to the metropolitan centers, it is important to note that not all riverine floods recorded in DFO are experienced as negative events, as households built they livelihood systems around them, especially close to the metropolitan areas. They learned to live with floods. Finally, the largest damage is inflicted by hurricane force winds, with regular exposure and proximity to the urban centers, which both exacerbate the welfare losses substantially.

Overall, the study shows that there is promise in using meteorological data to construct spatially disaggregated weather event and weather hazard maps, the first objective of the study. Such data are becoming increasingly available and natural event and hazard maps have also important direct applications for policymakers beyond their use in estimating the welfare effects of disasters. The fine‐tuning and validation of such maps is an important area for further research. Second, there are important long run negative effects of being regularly confronted with natural disasters. Third, short run losses can be substantial, with hurricanes causing most havoc. Fourth, there are signs of adaptation, with frequent exposure to localized and riverine floods reducing the welfare losses associated with these events, partly through the development of effective disaster relief systems. There is however no adaptation to hurricanes, rather the contrary, with high frequency of hurricanes exacerbating the losses from particular events. Fifth, those further away from the large urban centers often enjoy more immediate disaster relief which appears to mitigate the current effects of natural hazards, underscoring the importance of effective disaster relief systems. In the absence of further support systems, they likely also adopted less risky, but also less remunerative portfolios. Sixth, the disaster relief systems have largely eluded areas affected by hurricane force winds so far, an important area of attention Vietnamese policymakers.