The Local Economic Impact of Natural Disasters
Abstract/Contents
- Abstract
- We use county panel data to study the dynamic responses of local economies after natural disasters in the U.S. Specifically, we estimate disaster impulse response functions for personal income per capita and a broad range of other economic outcomes, using a panel version of the local projections estimator. In contrast to some recent cross-country studies, we find that disasters increase total and per capita personal income over the longer run (as of 8 years out). The effect is driven initially largely by a temporary employment boost and in the longer run by an increase in average weekly wages. We then assess the heterogeneity of disaster impacts across several dimensions. We find that the longer-run increase in income per capita rises with disaster severity, as measured by monetary damages. Hurricanes and tornados yield longer run increases in income, while floods do not. The longer run increase in income—which has on average become smaller over time—tends to rise with recent disaster experience and is absent for counties with no recent experience. Finally, state-level analyses and estimates of spatial spillovers across counties suggest that, while over the short- to medium-run, the regional and local impacts of disasters on personal income are similar, over the longer run the net regional effect may be negative, in contrast to the positive local effect.
Description
| Type of resource | text |
|---|---|
| Date created | September 9, 2021 |
Creators/Contributors
| Author | Roth Tran, Brigitte |
|---|---|
| Author | Wilson, Daniel |
| Organizer of meeting | Diamond, Rebecca |
| Organizer of meeting | van Dijk, Winnie |
| Organizer of meeting | Schneider, Martin |
| Organizer of meeting | Tsivanidis, Nick |
Subjects
| Subject | economics |
|---|---|
| Genre | Text |
| Genre | Working paper |
| Genre | Grey literature |
Bibliographic information
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- License
- This work is licensed under a Creative Commons Attribution 4.0 International license (CC BY).
Preferred citation
- Preferred citation
- Roth Tran, B. and Wilson, D. (2022). The Local Economic Impact of Natural Disasters. Stanford Digital Repository. Available at https://purl.stanford.edu/dz308cb9767
Collection
SITE Conference 2021
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