Role of Asset Protection Strategies in the Recovery of Productive Assets: Evidence from Nepal’s Earthquake

Abstract

More than a decade after Nepal’s 2015 earthquake, empirical research on the recovery of productive assets, such as crops, livestock, and farm infrastructure remains limited. In particular, few studies have examined the effectiveness of various asset protection strategies, such as public aid and political connections, in supporting post-disaster recovery. Similarly, no empirical evidence has explicitly evaluated the adequacy of housing aid in covering reconstruction costs. This study addresses these gaps by investigating three main questions. First, it assesses the current status of asset recovery and examines the key factors, including protective strategies that have contributed to household recovery. Second, it analyzes the convergence patterns in the recovery process. Third, it evaluates whether the Government of Nepal’s housing grant sufficiently covered the costs of rebuilding homes. Using data from 680 rural households across nine earthquake-affected districts, the study applies econometric models to generate evidence-based insights. The results show that characteristics like the household head’s gender, marital status, and caste significantly influence recovery. Although migration, remittances, and borrowing offered limited support, strong ties with locally elected officials played a crucial role in asset restoration. The COVID-19 pandemic disrupted recovery efforts, and the analysis revealed a U-shaped convergence pattern in asset recovery. Importantly, the housing grant covered only about half of the reconstruction cost. These findings highlight the need for customized recovery strategies and robust disaster risk reduction policies to restore livelihoods and enhance resilience.