Sitting in the same boat: Subjective well-being and social comparison after an extreme weather event

How does subjective well-being depend on the fate of others when a covariate shock strikes? We address this question by providing novel evidence impact shock-induced damages experienced individuals and their reference group life satisfaction. do so examining case pastoralists in Mongolia, who faced once-in-50-years winter disaster. Our identification strategy exploits quasi-experimental nature extreme event. The empirical analysis builds detailed household panel survey, complemented with aggregated climate data historic livestock census data. Results show that exposure to event significantly strongly reduces even 4–5 years after occurred. negative is amplified observing peers doing economically worse. Similarly, increases perceived inequality among households assets at risk. argue increased sectoral disparities between those not engaged agriculture.