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The impact and externalities of natural disasters on local tax revenue in Colombia

Author

Listed:
  • Jhorland Ayala García
  • Sandy Dall’erba
  • William C. Ridley

Abstract

This paper studies the impact of natural disasters on tax revenue across Colombian municipalities. We follow a two-step approach to evaluate how a municipality’s tax revenue depends on natural disasters taking place both locally and in its trade partners. In the first step, we estimate a gravity model of bilateral trade and construct a matrix of estimated bilateral trade shares, allowing us to measure the strength of the economic relationships between municipalities. In the second step, our results reveal that natural disasters in the destination municipalities increase the tax revenue in the origin cities.

Suggested Citation

  • Jhorland Ayala García & Sandy Dall’erba & William C. Ridley, 2023. "The impact and externalities of natural disasters on local tax revenue in Colombia," Regional Studies, Taylor & Francis Journals, vol. 57(5), pages 857-867, May.
    • Handle: RePEc:taf:regstd:v:57:y:2023:i:5:p:857-867
    DOI: 10.1080/00343404.2022.2104830
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