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The impact of tropical cyclones on income inequality in the U.S.: An empirical analysis

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  • Kulanthaivelu, Eric

Abstract

Despite a growing number of studies on the effects of tropical cyclones on economic growth, not much is known about their effects on income inequality. This paper addresses this question by using a panel data set of U.S. counties affected during the period 2010–2019. It exploits geophysical information to construct the disaster intensity predictor, and shows that storm shocks significantly decrease local income inequality levels in the year that they occur. A close study of the composition effects reveals several interesting patterns. First, the immediate impact is driven by the two lowest quintiles and the top quintile of the income distribution. Second, the beneficial effects on income inequality are stabilised in the short-run and the frequency of events is a crucial parameter to consider as repeatedly exposed counties exhibit larger responses after a cyclone strike than their rarely exposed counterparts. Finally, among others, this study stresses the importance of social safety nets in counteracting tropical cyclones’ adverse income distributional effects.

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  • Kulanthaivelu, Eric, 2023. "The impact of tropical cyclones on income inequality in the U.S.: An empirical analysis," Ecological Economics, Elsevier, vol. 209(C).
    • Handle: RePEc:eee:ecolec:v:209:y:2023:i:c:s0921800923000964
    DOI: 10.1016/j.ecolecon.2023.107833
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    Cited by:

    1. Weiwei Wang & Yifan Zhao, 2023. "Impact of Natural Disasters on Household Income and Expenditure Inequality in China," Sustainability, MDPI, vol. 15(18), pages 1-15, September.

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    More about this item

    Keywords

    Natural disasters; Tropical cyclones; Income inequality; Economic impacts; Environmental risk;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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