18 Current droughts, localized and riverine floods no longer increase welfare and excess rainfall in the current year is now negatively related with consumption, at least when excess rain is not a regular phenomenon. The signs and statistical significance of past weather events, reflecting the lagged welfare effects, also change when they are interacted with their frequency.

Frequent exposure may induce the adoption of low risk, low return portfolios (Eswaran and Kotwal, 1990; Rosenzweig and Binswanger, 1993), but the associated welfare loss could also reflect accumulated asset loss (Carter and Barrett, 2006), issues further discussed below. Poor people may also concentrate in areas considered too risky to live in. Given the myriad of household and environmental controls that already capture household wealth, such as education, ownership of land and housing, access to public infrastructure and amenities, proximity to urban centers as well as agro‐ecological conditions (elevation and slope), the latter interpretation of the results is less likely. The results in columns (1) and (2) underscore especially the importance of controlling for the frequency of exposure in studying the immediate and lagged welfare effects of natural disasters.

_Those further away from large urban centers are poorer, but also tend to suffer less from being regularly confronted with natural disasters._ The welfare effects likely also differ depending on the proximity to large urban centers (Table 1, column 3). In particular, interaction of the different events with the distance (in tenths of hours) to cities with more than 500.000 inhabitants suggests that the welfare effects gradually change away from these large urban centers, with locations further away typically less affected. For example, while areas frequently hit by drought are less wealthy, frequent exposure to droughts appears less damaging in terms of welfare loss further away from the large cities, that is, after controlling for the welfare reducing effect of living far away from urban centers. Similarly, areas located in storm prone areas further away from the urban centers are less affected than those in storm prone areas close to the city. A similar phenomenon is observed when it comes to localized flooding –with frequent exposure less damaging among those further out.

Economies and livelihoods become more rural and agriculturally oriented further away from the metropolitan areas. Asset holdings and the share of agricultural land irrigated typically declines (Table A3) and the support systems weaken. In particular, households further away tend to be less likely to receive remittances from abroad and the amounts received tend to be smaller. And while they are as likely to receive domestic remittances and even more likely to receive disaster relief, the latter is still rare (only 12 % of the households received disaster relief during the 2002‐2004‐2006 surveys) and it usually comes in much smaller amounts than the relief received by those close to the metropolitan centers. Taken together these descriptive suggests that households further away are not only more exposed ex ante (at least to drought) but also have lower capacity to cope with natural disaster ex post (less assets/savings and less effective support systems). This may have induced them to adopt portfolios that are more resilient to damage from natural disasters, though portfolios that are also less remunerative, as indicated by the steep declining gradient in household welfare as one moves away from the metropolitan centers.

From this perspective, the reverse finding on riverine flooding comes as a surprise. Out of the 4 disasters considered, only frequent exposure to riverine flooding is associated with an increase (as opposed to a decline) in living standards, with its benefits declining as one moves away from the major metropolitan centers. In this case, regular flooding seems to have induced a superior