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The Economic Growth Impact of Hurricanes: Evidence from US Coastal counties

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  • Eric Strobl

    (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)

Abstract

We estimate for the first time the impact of hurricane strikes on local economic growth rates and how this is reflected in more aggregate growth patterns. To this end we assemble a panel data set of US coastal counties' growth rates and construct a novel hurricane destruction index that is based on a monetary loss equation, local wind speed estimates derived from a physical wind field model, and local exposure characteristics. Our econometric results suggest that in response to a hurricane strike a county's annual economic growth rate will initially fall by 0.8, but then partially recover by 0.2 percentage points. While the pattern is qualitatively similar at the state level, the net effect over the long term is negligible. Hurricane strikes do not appear to be economically important enough to be reflected in national economic growth rates.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number hal-00392382.

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Date of creation: 07 Jun 2009
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Handle: RePEc:hal:wpaper:hal-00392382

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Keywords: hurricanes; economic growth; US coastal counties;

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  1. Toya, Hideki & Skidmore, Mark, 2007. "Economic development and the impacts of natural disasters," Economics Letters, Elsevier, vol. 94(1), pages 20-25, January.
  2. Matthew Higgins & Daniel Levy & Andrew Young, 2005. "Growth and Convergence across the US: Evidence from County-Level Data," Macroeconomics 0505009, EconWPA.
  3. Richard Evans & Yingyao Hu & Zhong Zhao, 2010. "The fertility effect of catastrophe: U.S. hurricane births," Journal of Population Economics, Springer, vol. 23(1), pages 1-36, January.
  4. Eric Strobl & Frank Walsh, 2009. "The Re-Building Effect of Hurricanes: Evidence from Employment in the US Construction Industry," Economics Bulletin, AccessEcon, vol. 29(4), pages 3059-3066.
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  9. John C. Bluedorn, 2005. "Hurricanes: Intertemporal Trade and Capital Shocks," Economics Series Working Papers 241, University of Oxford, Department of Economics.
  10. Belasen, Ariel R. & Polachek, Solomon, 2008. "How Hurricanes Affect Employment and Wages in Local Labor Markets," IZA Discussion Papers 3407, Institute for the Study of Labor (IZA).
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  13. Rappaport, Jordan & Sachs, Jeffrey D, 2003. " The United States as a Coastal Nation," Journal of Economic Growth, Springer, vol. 8(1), pages 5-46, March.
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Cited by:
  1. Lazzaroni, S. & van Bergeijk, P.A.G., 2013. "Natural disasters impact, factors of resilience and development: A meta-analysis of the macroeconomic literature," ISS Working Papers - General Series 554, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  2. van Bergeijk, P.A.G. & Lazzaroni, S., 2013. "Macroeconomics of natural disasters," ISS Working Papers - General Series 50075, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  3. Kousky, Carolyn, 2012. "Informing Climate Adaptation: A Review of the Economic Costs of Natural Disasters, Their Determinants, and Risk Reduction Options," Discussion Papers dp-12-28, Resources For the Future.
  4. Blake Sisk & Carl Bankston, 2014. "Hurricane Katrina, a Construction Boom, and a New Labor Force: Latino Immigrants and the New Orleans Construction Industry, 2000 and 2006–2010," Population Research and Policy Review, Springer, vol. 33(3), pages 309-334, June.
  5. Gabriel Felbermayr & Jasmin Gröschl, 2013. "Natürlich negativ: Der Wachstumseffekt von Naturkatastrophen," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 66(19), pages 16-22, October.
  6. Murphy, Anthony & Strobl, Eric, 2009. "The Impact of Hurricanes on Housing Prices: Evidence from US Coastal Cities," MPRA Paper 19353, University Library of Munich, Germany.
  7. Alexander S. Skorobogatov, 2014. "An Ongoing Reversal Of Fortune Among Russian Cities: City Age, Natural Resources, And Changing Spatial Income Distribution," HSE Working papers WP BRP 60/EC/2014, National Research University Higher School of Economics.
  8. Yamamura, Eiji, 2011. "Public sector corruption and the probability of technological disasters," MPRA Paper 34833, University Library of Munich, Germany.
  9. Vasco M. CARVALHO & NIREI Makoto & SAITO Yukiko, 2014. "Supply Chain Disruptions: Evidence from the Great East Japan Earthquake," Discussion papers 14035, Research Institute of Economy, Trade and Industry (RIETI).
  10. Ariel Belasen & Chifeng Dai, 2014. "When oceans attack: assessing the impact of hurricanes on localized taxable sales," The Annals of Regional Science, Springer, vol. 52(2), pages 325-342, March.
  11. Guglielmo Barone & Sauro Mocetti, 2014. "Natural disasters, growth and institutions: a tale of two earthquakes," Temi di discussione (Economic working papers) 949, Bank of Italy, Economic Research and International Relations Area.
  12. Gabriel J. Felbermayr & Jasmin Gröschl, 2013. "Naturally Negative: The Growth Effects of Natural Disasters," CESifo Working Paper Series 4439, CESifo Group Munich.
  13. Deryugina, Tatyana, 2011. "The Role of Transfer Payments in Mitigating Shocks: Evidence From the Impact of Hurricanes," MPRA Paper 53307, University Library of Munich, Germany, revised 08 Aug 2013.
  14. Martina Kirchberger, 2014. "Natural disasters and labour markets," CSAE Working Paper Series 2014-19, Centre for the Study of African Economies, University of Oxford.
  15. Yamamura, Eiji, 2013. "Impact of natural disasters on income inequality: Analysis using panel data during the period 1965 to 2004," MPRA Paper 45623, University Library of Munich, Germany.

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