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Long-term impact of natural disasters on Vietnamese income per capita: the case of typhoon Durian

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  • Khac Hieu Nguyen

    (Ho Chi Minh City University of Technology and Education, Vietnam)

  • Thi Thu Tra Pham

    (RMIT University, Vietnam)

Abstract

This study estimates the effect of natural disasters on Vietnamese income per capita in both short and long-term. The analysis also evaluates the effects by sources of income including income from salary; income from agriculture, fishery, forest; and income from industry, construction, trade, and services. Typhoon Durian happened in December 2006 in southern provinces of Vietnam is chosen for the comparative case study. The analysis applies the Synthetic control method (SCM) to construct a counterfactual with respect to two different control groups and conducts a permutation test for the estimated values. The results show that typhoon Durian decreased aggregate income per capita of the affected region and the effect was long lasting. The reduction of monthly income per capita was estimated to be 56,925 VND which accounts for 7.9% of the total income. The most affected source of income is from agriculture, forestry, and fishery.

Suggested Citation

  • Khac Hieu Nguyen & Thi Thu Tra Pham, 2020. "Long-term impact of natural disasters on Vietnamese income per capita: the case of typhoon Durian," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 590-603, September.
    • Handle: RePEc:ssi:jouesi:v:8:y:2020:i:1:p:590-603
    DOI: 10.9770/jesi.2020.8.1(41)
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    References listed on IDEAS

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    1. Coffman, Makena & Noy, Ilan, 2012. "Hurricane Iniki: measuring the long-term economic impact of a natural disaster using synthetic control," Environment and Development Economics, Cambridge University Press, vol. 17(2), pages 187-205, April.
    2. Gignoux, Jérémie & Menéndez, Marta, 2016. "Benefit in the wake of disaster: Long-run effects of earthquakes on welfare in rural Indonesia," Journal of Development Economics, Elsevier, vol. 118(C), pages 26-44.
    3. Heger, Martin Philipp & Neumayer, Eric, 2019. "The impact of the Indian Ocean tsunami on Aceh’s long-term economic growth," Journal of Development Economics, Elsevier, vol. 141(C).
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    More about this item

    Keywords

    typhoon; income per capita; synthetic control method;
    All these keywords.

    JEL classification:

    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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