Hostname: page-component-745bb68f8f-kw2vx Total loading time: 0 Render date: 2025-01-30T21:44:41.888Z Has data issue: false hasContentIssue false
  • English
  • Français

Natural disasters and regional development – the case of earthquakes

Published online by Cambridge University Press:  11 June 2019

Marius Fabian ,
Christian Lessmann  and
Tim Sofke
Marius Fabian
Affiliation:
Technische Universität Braunschweig, Carl-Friedrich-Gauss-Faculty, Institute of Economics, Braunschweig, Germany
Christian Lessmann*
Affiliation:
Technische Universität Braunschweig, Carl-Friedrich-Gauss-Faculty, Institute of Economics, Braunschweig, Germany, Ifo Institute & CESifo
Tim Sofke
Affiliation:
Technische Universität Braunschweig, Carl-Friedrich-Gauss-Faculty, Institute of Economics, Braunschweig, Germany
*
*Corresponding author. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

We analyze the impact of earthquakes on nighttime lights at a sub-national level, i.e., on grids of different size. We argue that existing studies on the impact of natural disasters on economic development have several important limitations, both at the level of the outcome variable as well as at the level of the independent variable, e.g., the timing of an event and the measuring of its intensity. We aim to overcome these limitations by using geophysical event data on earthquakes together with satellite nighttime lights. Using panel fixed effects regressions covering the entire world for the period 1992–2013, we find that earthquakes reduce both light growth rates and light levels significantly. The effects persist for approximately 5 years, but we find no long-run effects. Effects are stronger the smaller the area of a unit of observation. National institutions and economic conditions are relevant moderating factors.

Keywords

developmentearthquakesevent datagrid datagrowthinstitutionsluminositynatural disasterssatellite nighttime lightsO44Q54
Type
Research Article
Information
Environment and Development Economics , Volume 24 , Issue 5 , October 2019 , pp. 479 - 505
Copyright
Copyright © Cambridge University Press 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alesina, A, Michalopoulos, S and Papaioannou, E (2016) Ethnic inequality. Journal of Political Economy 124, 428–488.Google Scholar
Barone, G and Mocetti, S (2014) Natural disasters, growth and institutions: a tale of two earthquakes. Journal of Urban Economics 84, 52–66.Google Scholar
Cavallo, E, Galiani, S, Noy, I and Pantano, J (2013) Catastrophic natural disasters and economic growth. The Review of Economics and Statistics 95, 1549–1561.Google Scholar
Chen, X and Nordhaus, WD (2011) Using luminosity data as a proxy for economic statistics. Proceedings of the National Academy of Sciences 108, 8589–8594.Google Scholar
Donaldson, D and Storeygard, A (2016) The view from above: applications of satellite data in economics. Journal of Economic Perspectives 30, 171–198.Google Scholar
Elvidge, CD, Baugh, KE, Kihn, EA, Kroehl, HW, Davis, ER and Davis, CW (1997) Relation between satellite observed visible-near infrared emissions, population, economic activity and electric power consumption. International Journal of Remote Sensing 18, 1373–1379.Google Scholar
Felbermayr, G and Gröschl, J (2013) Natural disasters and the effect of trade on income: a new panel IV approach. European Economic Review 58, 18–30.Google Scholar
Felbermayr, G and Gröschl, J (2014) Naturally negative: the growth effects of natural disasters. Journal of Development Economics 111, 92–106.Google Scholar
Felbermayr, G, Gröschl, J, Sanders, M, Schippers, V and Steinwachs, T (2018) Shedding light on the spatial diffusion of disasters. CESifo Working Paper Series No. 7146.Google Scholar
Gennaioli, N, La Porta, R, Lopez De Silanes, F and Shleifer, A (2014) Growth in regions. Journal of Economic Growth 19, 259–309.Google Scholar
Haddad, EA and Teixeira, E (2015) Economic impacts of natural disasters in megacities: the case of floods in São Paulo, Brazil. Habitat International 45, 106–113.Google Scholar
Henderson, JV, Storeygard, A and Weil, DN (2012) Measuring economic growth from outer space. American Economic Review 102, 994–1028.Google Scholar
Henderson, JV, Squires, T, Storeygard, A and Weil, D (2017) The global distribution of economic activity: nature, history, and the role of trade. Quarterly Journal of Economics 133, 357–406.Google Scholar
Hodler, R and Raschky, PA (2014) Regional favoritism. Quarterly Journal of Economics 129, 995–1033.Google Scholar
Kahn, ME (2005) The death toll from natural disasters: the role of income, geography, and institutions. Review of Economics and Statistics 87, 271–284.Google Scholar
Kammouh, O, Zamani Noori, A, Marasco, S and Cimellaro, GP (2018) Restoration time of infrastructures following earthquakes. Proceedings of the 11th U.S. National Conference on Earthquake Engineering, 25-29 June 2018, Los Angeles. Earthquake Engineering Research Institute, Los Angeles, CA.Google Scholar
Keola, S, Andersson, M and Hall, O (2015) Monitoring economic development from space: using nighttime light and land cover data to measure economic growth. World Development 66, 322–334.Google Scholar
Klomp, J (2016) Economic development and natural disasters: a satellite data analysis. Global Environmental Change 36, 67–88.Google Scholar
Lessmann, C (2014) Spatial inequality and development – is there an inverted-U relationship? Journal of Development Economics 106, 35–51.Google Scholar
Lessmann, C and Seidel, A (2017) Regional inequality, convergence, and its determinants – a view from outer space. European Economic Review 92, 110–132.Google Scholar
Ley, E and Misch, F (2014) Output data revisions in low-income countries. Paper presented at the ‘ Macroeconomic Challenges Facing Low-Income Countries, New Perspectives’ Conference, 30-31 January 2014, Washington, DC. Sponsored by the International Monetary Fund.Google Scholar
Liu, Y, Nair, N-K, Lopez Renton, A and Wilson, S (2017) Impact of the Kikoura earthquake on the electrical power system infrastructure. Bulletin of the New Zealand Society for Earthquake Engineering 50, 300–305.Google Scholar
Loayza, NV, Olaberria, E, Rigolini, J and Christiaensen, L (2012) Natural disasters and growth: going beyond the averages. World Development 40, 1317–1336.Google Scholar
Martinez, LR (2019) How much should we trust the dictator's GDP growth estimates? Working papers, University of Chicago. Available at SSRN, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3093296.Google Scholar
Nordhaus, W and Chen, X (2016) Global gridded geographically based economic data (G-Econ), Version 4. Tech. rep., Palisades, NY: NASA Socioeconomic Data and Applications Center (SEDAC). Available at http://doi.org/10.7927/H42V2D1C.Google Scholar
Noy, I (2009) The macroeconomic consequences of disasters. Journal of Development Economics 88, 221–231.Google Scholar
Openshaw, S and Taylor, PJ (1979) A million or so correlation coefficients: three experiments on the modifiable areal unit problem. In Wrigley, N (ed), Statistical Applications in the Spatial Sciences. London: Pion, pp. 127–144.Google Scholar
Raddatz, C (2007) Are external shocks responsible for the instability of output in low-income countries? Journal of Development Economics 84, 155–187.Google Scholar
Raschky, PA (2013) Estimating the effects of West Sumatra Public Asset Insurance Program on short-term recovery after the September 2009 earthquake. Working Papers DP-2013-35, Economic Research Institute for ASEAN and East Asia (ERIA).Google Scholar
Skidmore, M and Toya, H (2002) Do natural disasters promote long-run growth? Economic Inquiry 40, 664–687.Google Scholar
Spence, W, Sipkin, SA and Choy, GL (1989) Measuring the size of an earthquake. Earthquakes & Volcanoes 21, 58–63.Google Scholar
Strobl, E (2011) The economic growth impact of hurricanes: evidence from U.S. coastal counties. The Review of Economics and Statistics 93, 575–589.Google Scholar
Strobl, E (2012) The economic growth impact of natural disasters in developing countries: evidence from hurricane strikes in the Central American and Caribbean regions. Journal of Development Economics 97, 130–141.Google Scholar
Toya, H and Skidmore, M (2007) Economic development and the impacts of natural disasters. Economics Letters 94, 20–25.Google Scholar