4. However, one year later, as shown in Fig. 3, their intensity and frequency are spread considerably between years and countries. 3, the empirical approach is described. Tropical cyclones and climate change - Wikipedia Eastern North Carolina is prone to flooding associated with tropical cyclones (e.g., hurricanes Fran in 1996 and Matthew in 2016) and it is likely that an event similar to the Hurricane Florence . 2014) remain. Other studies identify negative effects that are only significant in the short run but are insignificant in the long run (Strobl 2012; Bertinelli and Strobl 2013; Elliott etal. An exception forms the mean damage robustness test for the wholesale, retail trade, restaurants, and hotels sectors, where the coefficient turns slightly insignificant (\(p=0.12\)). Additionally, it seems that the fishing sector is responsible for the negative supply shock in the agriculture, hunting, forestry, and fishing sector aggregate. The storm damaged and destroyed famand, vital infrastructure and thousands of homes, dealing another devastating blow to families still trying to put their lives together after. 2015). NHESS - Economic damage and spillovers from a tropical cyclone With this paper, I close this research gap by using an InputOutput panel data set to analyze potential sectoral interactions after the occurrence of a tropical cyclone. 2019), and the sector other activities (JP) comprises, among others, the financial sector. Queensland has 20% of Australia's sugar cane production, but . The weighted tropical cyclone damage variables are orthogonal to economic growth as well as the InputOutput coefficients, and the panel approach allows me to identify the causal effect. 2020), and, simultaneously, more people will be exposed to tropical cyclones. Sept. 16: Some areas receive as much as 34 inches of rain from Sept. 13 to Sept. 16. First, I add to the research area on the macroeconomic effects of disasters. Anthropogenic influences on major tropical cyclone events 2023 Springer Nature Switzerland AG. 2014). Notes This figure shows the significant effects of a one standard deviation increase in tropical cyclone damage on the respective InputOutput coefficient. Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. World Dev 21(9):14171434, Angrist JD, Pischke J-S (2009) Mostly harmless econometrics: an empiricists companion. In order to examine tropical cyclones as exogenous weather shocks, I pursue a panel data approach with year and country fixed effects in a simple growth equation framework (Strobl 2012; Dell etal. This exogenous measure allows me to identify an immediate negative growth effect of tropical cyclones for two out of seven sectoral aggregates including agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels. Better post-disaster assistance is not the only required improvement; policymakers should also find ways to better prepare the affected sectors of their economy for possible effects of tropical cyclones before they strike. volume78,pages 545569 (2021)Cite this article. 4 and 6 with the population weighted damage for the agricultural sectoral aggregate. It rather points to the presence of (delayed) negative effects of tropical cyclones from which the sectors cannot recover. How did the tropical cyclone Florence impact the following ? 7), we can only see significant changes in one quarter of all InputOutput connections, while in model 4 for the direct costs, only two sector aggregates are negatively affected. These results are line with previous empirical studies. Tropical cyclones only lead to a small number of production process changes with coefficients being relatively small. Additionally, tropical cyclone intensity is measured by remote sensing methods and other meteorological measurements. Mohan (2017) provides further evidence that in Caribbean countries agricultural crops are more severely affected by hurricanes compared to livestock. Details of How did the tropical cyclone eloise impact the environment? For storm surge damage this is not possible, since there exists no global data set so far. Figure 6 illustrates the cumulative point estimates of the past influence of tropical cyclone damage on the different sectoral growth variables.Footnote 22 The x-axis represents the lags of the damage variable, while the y-axis indicates the size of the cumulative coefficient \(\beta\) (in standard deviations). From a theoretical perspective, a natural disaster can have both positive and negative effects. How do tropical storms affect people and the environment? For the agricultural sector, I use the fraction of exposed agricultural land, while for the remaining sectors, I use the gridded population. Hurricane Florence's Economic Damage on Carolinas, Virginia, and US It remains unclear if there exists some key sector, which, if damaged, results in a negative shock for the other sectors. Cyclone Nivar : A cyclone is a general term for a weather system in which winds rotate inwardly to an area of low atmospheric pressure. https://www.munichre.com/en/solutions/for-industry-clients/natcatservice.html, Newey WK, West KD (1987) A simple, positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix. Technical report, Centre for Environmental Data Analysis (CEDA), World Bank (2010) Natural hazards, unnatural disasters: the economics of effective prevention: overview. During 5 February, a tropical low was located south of Bali, Indonesia. 2010). Rev Environ Econ Policy 13(2):167188, Bulte E, Xu L, Zhang X (2018) Post-disaster aid and development of the manufacturing sector: lessons from a natural experiment in China. So unfortunately, WA can expect regular cyclone impacts even as the climate . Economics of Disasters and Climate Change (pp. 2632). 25111299), Oosterhaven J (2017) On the limited usability of the inoperability IO model. 2013). Since the tropical cyclone data has global coverage since 1950, I am able to introduce lags of up to 20years without losing observations of my dependent variable, which ranges from 1971 to 2015. 2008), and for a cross-section of 153 countries (Toya & Skidmore 2007). Country-year observations above two standard deviations are labeled with the respective ISO3 code. Therefore, we can be sure that the reduced sample size does not drive the new results. One major effort of this paper is to generate a new meaningful sectoral damage variable on a country-year level. Global warming has 'changed' spread of tropical cyclones around the world Positive effects include, for instance, as a consequence of the destruction of capital, that the marginal productivity of capital increases, making it more attractive to invest in capital in the affected area (Klomp and Valckx 2014). The storm will likely damage homes. Finally, I test two sub-samples, one with all potential outliers and one where I include only the countries exposed to tropical cyclones.Footnote 32. 2012), and the higher exposure of people in large urban agglomerations near oceans (World Bank 2010), the overall damage and the number of people affected by tropical cyclones have been increasing since the 1970s (Guha-Sapir and CRED 2020). Finally, the standard errors \(\epsilon _{i,t}\) could be biased by the autocorrelation of unobservable omitted variables (Hsiang 2016). Appendix A.3 provides a more detailed description of the composition of the individual ISIC categories. In contrast to this, the no recovery hypothesis states that natural disasters can lead to a permanent decrease of the income level without the prospect of reaching the pre-disaster growth path again.Footnote 1 This could result from a situation where recovery measures are not effectively implemented or where various negative income effects accumulate over time (Hsiang and Jina 2014; Onuma etal. InputOutput models that analyze indirect costs, such as the Inoperability Input-Ouptut model (Haimes and Jiang 2001) or the Ghosh model (Ghosh 1958), require many assumptions that tend to be problematic (Oosterhaven 2017).
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