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Green Lights: Quantifying the economic impacts of drought

Author

Listed:
  • Peter Fisker

    (Department of Food and Resource Economics, University of Copenhagen)

Abstract

This study investigates the effect of drought on economic activity globally using remote sensing data. In particular, predicted variation in greenness is correlated with changes in the density of artificial light observed at night on a grid of 0.25 degree latitude-longitude pixels. I define drought as greenness estimated by lagged variation in monthly rainfall and temperature. This definition of drought performs well in identifying self-reported drought events since 2000 compared with measures of drought that do not take greenness into account, and the subsequent analysis indicates that predicted variation in greenness is positively associated with year-on-year changes in luminosity: If a unit of observation experiences a predicted variation in greenness that lies 1 standard deviation below the global mean, on average 1.5 - 2.5 light pixels out of 900 are extinguished that year. Finally, an attempt is made to estimate the global cost of drought.

Suggested Citation

  • Peter Fisker, 2014. "Green Lights: Quantifying the economic impacts of drought," IFRO Working Paper 2014/11, University of Copenhagen, Department of Food and Resource Economics.
    • Handle: RePEc:foi:wpaper:2014_11
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    File URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2014/IFRO_WP_2014_11.pdf
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    References listed on IDEAS

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    1. Alfani, Federica & Dabalen, Andrew & Fisker, Peter & Molini, Vasco, 2015. "Vulnerability to malnutrition in the West African Sahel," Policy Research Working Paper Series 7171, The World Bank.
    2. Eichenauer, Vera Z. & Fuchs, Andreas & Kunze, Sven & Strobl, Eric, 2020. "Distortions in aid allocation of United Nations flash appeals: Evidence from the 2015 Nepal earthquake," World Development, Elsevier, vol. 136(C).

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    Keywords

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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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