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Weathering Storms: Understanding the Impact of Natural Disasters in Central America

Author

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  • Oscar A. Ishizawa

    () (The World Bank)

  • Juan Jose Miranda

    () (The World Bank)

Abstract

Abstract In the past decades, natural disasters have caused substantial human and economic losses in Central America, with strong adverse impacts on gross domestic product per capita, income, and poverty reduction. This study provides a regional perspective on the short-term impact of hurricane windstorms on socioeconomic indicators. Apart from modeling the socioeconomic impact at the macro and micro levels, the study incorporates and juxtaposes data from a hurricane windstorm model categorizing three hurricane damage indexes, which lends a higher level of detail, nuance, and therefore accuracy and comprehensiveness to the study. One standard deviation in the intensity of a hurricane windstorm leads to a decrease in growth of total per capita gross domestic product of between 0.9 and 1.6%, and a decrease in total income and labor income by 3%, which in turn increases moderate and extreme poverty by 1.5 percentage points. These results demonstrate the causal relationship between hurricane windstorm impacts and poverty in Central America, producing regional evidence that could improve targeting of disaster risk management policies toward those most impacted and thus whose needs are greatest.

Suggested Citation

  • Oscar A. Ishizawa & Juan Jose Miranda, 2019. "Weathering Storms: Understanding the Impact of Natural Disasters in Central America," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 181-211, May.
  • Handle: RePEc:kap:enreec:v:73:y:2019:i:1:d:10.1007_s10640-018-0256-6
    DOI: 10.1007/s10640-018-0256-6
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    References listed on IDEAS

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    1. Noy, Ilan, 2009. "The macroeconomic consequences of disasters," Journal of Development Economics, Elsevier, vol. 88(2), pages 221-231, March.
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    More about this item

    Keywords

    Hurricanes; Poverty; Natural disasters; Central America; Economic growth; Vulnerability;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • 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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