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Medium-run local economic effects of a major earthquake

Author

Listed:
  • Paula Aguirre
  • Kenzo Asahi
  • Diego Diaz-Rioseco
  • Ignacio Riveros
  • Rodrigo O Valdés

Abstract

Existing research is inconclusive regarding the longer-term economic effects of earthquakes. We examine the medium-run impacts of the 2010 earthquake in Chile, the sixth-largest ever recorded, using value-added tax collection as a proxy for economic activity at the municipal level and a measure of local ground-shaking intensity. We find that the affected municipalities suffered a relevant and persistent drop in their economic activity of about 10%, 8–9 years after the event. We discuss the plausibility of the assumption of conditional parallel trends and show that the overall results are robust to using alternative estimation methods.

Suggested Citation

  • Paula Aguirre & Kenzo Asahi & Diego Diaz-Rioseco & Ignacio Riveros & Rodrigo O Valdés, 2023. "Medium-run local economic effects of a major earthquake," Journal of Economic Geography, Oxford University Press, vol. 23(2), pages 277-297.
    • Handle: RePEc:oup:jecgeo:v:23:y:2023:i:2:p:277-297.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbac010
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    More about this item

    Keywords

    Earthquake; economic impact; local economies;
    All these keywords.

    JEL classification:

    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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