This paper looks at the direct and indirect health-related monetary costs that households incurred in the short and medium terms because of the 2004 Indian Ocean Tsunami. The paper uses three rounds of a longitudinal household survey of Aceh and North Sumatra where data were collected 5–17, 18–30, and 31–40 months after the event. The results show that direct costs, measured by out-of-pocket health expenses, increased significantly by a third (35%) compared to pre-tsunami spending, for households living in heavily damaged areas. This effect, however, was seen only in the short-term, 5–17 months after the tsunami struck, and did not persist to the later years. The tsunami had significant effects on mental wellbeing as measured using the post-traumatic stress reaction score (PTSR). Among men, these changes to mental wellbeing were associated with a 4% fall in wage earnings two years after the tsunami. Physical health also worsened according to self-reported measures, and this was associated with a 34% fall in men’s earnings three years after the tsunami. Thus, although the direct costs of the tsunami in terms of increasing household out-of-pocket health spending were seen only in the short term, the indirect costs via effects on mental and physical health were apparent two to three years after the event.
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