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Storms, Climate Change, And The Us Economy: A National Analysis

Author

Listed:
  • Joelle SAAD-LESSLER
  • George TSELIOUDIS

Abstract

Climate change models predict that storm frequency will decrease over time, while storm intensity will increase. This paper looks at the national effects of storm frequency and storm intensity on various industries in the US economy, using yearly data from 1977 through 1997. We find that yearly deviations in storm frequency and intensity around their state specific and year specific averages have a statistically significant effect on the gross state products of a number of industries. We use these estimated impacts to calculate the national economic consequences of changes in storm frequency and intensity that are predicted by climate change models. The results imply that a predicted drop in storm frequency leads to $5.6 billion in losses (0.07% of the US economy in 1997), while a predicted increase in storm intensity has no significant economic impact. Thus, though the effects of storms on gross industry product are statistically significant, their economic effects are small.

Suggested Citation

  • Joelle SAAD-LESSLER & George TSELIOUDIS, 2010. "Storms, Climate Change, And The Us Economy: A National Analysis," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(1).
  • Handle: RePEc:eaa:aeinde:v:10:y:2010:i:1_7
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    References listed on IDEAS

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    1. Deschenes, Olivier & Greenstone, Michael, 2004. "The Economic Impacts of Climate Change: Evidence from Agricultural Profits and Random Fluctuations in Weather," University of California at Santa Barbara, Economics Working Paper Series qt6w7242cj, Department of Economics, UC Santa Barbara.
    2. Dug Man Lee & Kenneth S. Lyon, 2004. "A Dynamic Analysis of the Global Timber Market under Global Warming: An Integrated Modeling Approach," Southern Economic Journal, Southern Economic Association, vol. 70(3), pages 467-489, January.
    3. Martha Starr-McCluer, 2000. "The effects of weather on retail sales," Finance and Economics Discussion Series 2000-08, Board of Governors of the Federal Reserve System (U.S.).
    4. William D. Nordhaus, 2006. "The Economics of Hurricanes in the United States," NBER Working Papers 12813, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Climate change; Storm frequency; Storm intensity.;

    JEL classification:

    • 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

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