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

  • Eric Strobl

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

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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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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  1. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
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  3. 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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  14. Matthew E. Kahn, 2005. "The Death Toll from Natural Disasters: The Role of Income, Geography, and Institutions," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 271-284, May.
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