Hurricane Florence Case Study - Internet Geography (2020) provide evidence that after hurricane strikes in Central America, a short-term negative growth period (12months) is compensated by a positive recovery in the second year. However, an area weight has the disadvantage of including largely unpopulated areas, such as deserts, which are economically meaningless. Stata J 17(3):630651, Holland GJ (1980) An analytic model of the wind and pressure profiles in hurricanes. What will Hurricane Florence impact be on the economy? Possible mechanisms for this situation are, for example, additional capital flowssuch as remittances from relatives living abroad (Yang 2008)international aid (deMel etal. 7), we can only see significant changes in one quarter of all InputOutput connections, while in model 4 for the direct costs, only two sector aggregates are negatively affected. Circle diameter is proportional to the average sectoral share on total GDP. This is because there are regions showing increases or . Barrot J-N, Sauvagnat J (2016) Input specificity and the propagation of idiosyncratic shocks in production networks. This will provide further insights into whether production processes are seriously distorted by tropical cyclones. During 5 February, a tropical low was located south of Bali, Indonesia. Nonetheless, the results can provide general guidance for international disaster relief organizations that are active in various countries on how to direct their long-run disaster relief programs. From a theoretical perspective, a natural disaster can have both positive and negative effects. Table 1 presents the results of the main specification for each of the seven annual sectoral GDP per capita growth rates. Cyclone Nivar and its Impact | Civils360 IAS 2013). This study provides an explanation about which sectors contribute to an overall negative GDP-effect of tropical cyclones identified by previous studies (Noy 2009; Strobl 2012; Elliott etal. In addition to damaging wind speed, salty sea spread and storm surge can cause salinization of the soil, leaving it useless for cultivation. Consequently, \(\beta ^j\) is the coefficient of main interest in this specification. PDF Tropical Cyclones: Impacts, the link to Climate Change and Adaptation 6: The manufacturing sectors ask significantly less input from it. Excellent proofreading was provided by Jamie Parsons and Harrison Bardwell. Glob Environ Change 26:183195, Knapp KR, Kruk MC, Levinson DH, Diamond HJ, Neumann CJ (2010) The international best track archive for climate stewardship (IBTrACS). Notes This figure shows the significant effects of a one standard deviation increase in tropical cyclone damage on the respective InputOutput coefficient. 2019). Finally, the standard errors \(\epsilon _{i,t}\) could be biased by the autocorrelation of unobservable omitted variables (Hsiang 2016). The damage estimates can be found in Table1. To underline the credibility of my regression analyses, I test the sensitivity of my results in various ways. 2012, 2013). Environ Resource Econ 78, 545569 (2021). Oscar A. Ishizawa, Juan Jos Miranda & Eric Strobl, Aiman Sana, Farzana Naheed Khan & Umaima Arif, Preeya S. Mohan, Nekeisha Spencer & Eric Strobl, Channing Arndt, Paul Chinowsky, James Thurlow, Jimena Alvarez, Dmitry Yumashev & Gail Whiteman, Environmental and Resource Economics Furthermore, the results of the randomization test show that the \(H_0\) of no effect of tropical cyclone damage can be rejected at the 1% and 5% level of confidence for the agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels sectors, respectively. The wind speed drops with distance to the center of the hurricane and as soon as it makes landfall. I also tested for lagged cumulative effects. These results are line with previous empirical studies. Circle diameters represent the average proportional share on total GDP ranging from 32% (other activities), over 12% (manufacturing) to 6% (construction).Footnote 25. Additionally, I cluster the standard errors at broader regional levels as a further robustness test. Section 5 concludes with a discussion of the results and highlights policy implications. The storm will likely damage homes. (2012) find no significant for the service sector.Footnote 21 Likely reason for this downturn could be less (domestic and international) touristic income for the restaurant and hotel sectors (Hsiang 2010; Lenzen etal. Therefore, I propose a new damage measure that explicitly considers these different exposures. The coefficients are interpreted by a one standard deviation increase in tropical cyclone damage (above zero).Footnote 24 For example, due to a standard deviation increase of tropical cyclone damage, the manufacturing sectors use -0.66% less input from the construction sector aggregate relative to the average InputOutput coefficient (0.0045) to produce one unit of output. The gray areas represent the respective 95% confidence intervals and the red line indicates the respective (connected) cumulative point estimates. The main causal identification stems from the occurrence of tropical cyclones, which are unpredictable in time and location (NHC 2016) and vary randomly within geographic regions (Dell etal. 4. Cyclone Cheneso. Possible reasons for these indirect effects, could be changes in fishing patterns in response to tropical cyclones (Bacheler etal. World Bank Policy Research Working Paper 5507. http://hdl.handle.net/10986/3991, Heinen A, Khadan J, Strobl E (2018) The price impact of extreme weather in developing countries. Flooding could prove devastating. PubMedGoogle Scholar. Within the agriculture, hunting, forestry, and fishing sectors, the negative effects become less pronounced with a zero effect being present after fouryears, while the wholesale, retail trade, restaurants, and hotels sectoral aggregate experiences a persistent negative growth even after 20years. In a similar manner, Mohan and Strobl (2017) find evidence that a positive growth effect of the construction sector, financed by international aid or government programs, lead to a fast recovery of South-Pacific Islands after tropical cyclones.Footnote 27, Significant effects of tropical cyclone damage on disaggregated InputOutput coefficients. Such data are positively correlated with GDP (Felbermayr and Grschl 2014) and prone to measurement errors (Kousky 2014). In contrast to this, the no recovery hypothesis states that natural disasters can lead to a permanent decrease of the income level without the prospect of reaching the pre-disaster growth path again.Footnote 1 This could result from a situation where recovery measures are not effectively implemented or where various negative income effects accumulate over time (Hsiang and Jina 2014; Onuma etal. Anthropogenic influences on major tropical cyclone events How did the tropical cyclone impact the people communities? Economic sectors most vulnerable to direct capital destruction of tropical cyclones must be identified. Nevertheless, we can learn from this analysis the important role of those manufacturing sectors that are not directly affected. Driven by climate change, at least in some ocean basins (Elsner etal. 2017). In: Bobrowsky PT (ed) Encyclopedia of natural hazards. It is possible that the economy exhibits positive growth rates after a first negative growth shock. For sectoral GDP effects, however, no such evidence exists so far. Positive effects include, for instance, as a consequence of the destruction of capital, that the marginal productivity of capital increases, making it more attractive to invest in capital in the affected area (Klomp and Valckx 2014). Some areas experience record rainfall with widespread flooding and predictions for it to get worse. The tests are conducted with the STATA command parmest (Newson 1998). Better post-disaster assistance is not the only required improvement; policymakers should also find ways to better prepare the affected sectors of their economy for possible effects of tropical cyclones before they strike. Geosci Model Dev 12(7):30853097, Bacheler NN, Shertzer KW, Cheshire RT, MacMahan JH (2019) Tropical storms influence the movement behavior of a demersal oceanic fish species. Nature 455(7209):9295, Emanuel K (2011) Global warming effects on U.S. hurricane damage. The seventh tropical depression, fifth named storm and the second . These surges, sometimes called tidal waves, can drown people and animals, and are often the greatest killers in a cyclone. To deal with this problem, I will re-estimate my regression models with Newey and West (1987) as well as spatial HAC standard errors (Hsiang 2010; Fetzer 2020), which allow for a temporal correlation of 10years and a spatial correlation of 1000 kilometer radius.Footnote 20. Tropical Cyclones | World Meteorological Organization The sectors least affected by indirect changes are the agriculture (ag), recycling (re), private households (ph), and export (ex) sectors. First, I account for the economic exposure by weighting the maximum occurred wind speed per grid cell and year by the number of exposed people living in that grid cell relative to the total population of the country. However, the country fixed effects partly control for this concern. Economica 25(97):5864, Grger A, Zylberberg Y (2016) Internal labor migration as a shock coping strategy: evidence from a typhoon. [2] Between 1979 and 2017, there was a global increase in the proportion of tropical cyclones of Category 3 and higher on the Saffir-Simpson scale. It is therefore important to examine their effects over time (Felbermayr and Grschl 2014; Hsiang and Jina 2014). The build-back-better hypothesis describes a situation where natural disasters first trigger a downturn of the economy, which is then followed by a positive stimulus, leading to a higher growth path than in the pre-disaster period. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The damaging winds are responsible for serious destruction of buildings and vegetation. Sci Rep 9(1):20452322. In contrast to Eq. Out of 49 parameter estimates, only 12 are significantly different from zero.Footnote 26 As expected, the heavily damaged agriculture, hunting, forestry, and fishing sector aggregate experiences the most changes. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/. Quick Answer: How Did Hurricane Florence Impact Public Health Tropical cyclones are large, cyclonically rotating wind systems that form over tropical or sub-tropical oceans and are mostly concentrated on months in summer or early autumn in both hemispheres (Korty 2013). Social, Environmental and Economic impacts - Tropical Cyclones - Weebly In comparison, in my analysis, I take meteorological data as input which is exogenous to the political and economic situation, contains all existing tropical cyclones, and has no quality fluctuations. Generally speaking, the proposed models offer a simple but strong way for causal interpretation of the impact of tropical cyclones on sectoral growth. Additionally, it is unexplained how the sectors are interconnected and if their structural dependence changes. Therefore, we can be sure that the reduced sample size does not drive the new results. Once the surface winds have reached a maximum sustained speed of 39 mph (63 km/h), it is classified as a tropical storm. However, as an additional robustness test, I also show a regression where I include these outliers and the results remain unchanged. Figure 6 demonstrates that three out of seven sectoral aggregates suffer from delayed negative impacts of tropical cyclones. This heat is the energy that is released or absorbed during a phase change in water. Admittedly, this will not fully solve potential endogeneity problems, and concerns about bad controls (Angrist & Pischke 2009) and over-controlling (Dell etal. Eur Econ Rev 101:441458, Chhibber A, Laajaj R (2008) Disasters, climate change and economic development in Sub-Saharan Africa: lessons and directions. Cyclone Eloise. Compared to the existing literature, the non-existing of a direct positive contemporaneous response of the construction sector is a new finding. WMO continues to monitor the "remarkable" tropical storm, which has cut a destructive path across . Queensland has 20% of Australia's sugar cane production, but . Best track data are a postseason reanalysis from different available data sources, including satellites, ships, aviation, and surface measurements, that are used to describe the position and intensity of tropical cyclones (Kruk etal. Their destructiveness has three sources: damaging winds, storm surges, and heavy rainfalls. The procedure is hierarchical and reaches from other official governmental publications over publications from other international organizations to the usage of data from commercial providers (United Nations Statistical Division 2015b). Tropical cyclones can have devastating economic consequences. Loayza etal. Estimated economic cost of Cyclone Pam in Vanuatu across all sectors was approximately 64% of the country's GDP in 2016. Other studies identify negative effects that are only significant in the short run but are insignificant in the long run (Strobl 2012; Bertinelli and Strobl 2013; Elliott etal. While the distribution reveals that on average, geographically smaller countries, such as Hong Kong, Dominica or Jamaica, have a higher damage, there exists a difference between both damage measures, even for the highly exposed countries. Color intensities indicate p values according to: \(p<0.01\), \(p<0.05\), \(p<0.1\). (2012) investigate the effect of natural disasters on three sectors (agriculture, manufacturing, service) in a global sample for the period 19612005. It claimed overall more than 50 deaths. Econometrica 49(6):14171426, Noy I (2009) The macroeconomic consequences of disasters. https://unstats.un.org/unsd/snaama/assets/pdf/methodology.pdf, United Nations Statistical Division (2015c) UN data. http://hdl.handle.net/10986/2512, Yang D (2008) Coping with disaster: the impact of hurricanes on international financial flows, 19702002. Additionally, Cole etal. J Afr Econ 17(Supplement2):ii7ii49, Cole MA, Elliott RJR, Okubo T, Strobl E (2019) Natural disasters and spatial heterogeneity in damages: the birth, life and death of manufacturing plants. https://ideas.repec.org/c/boc/bocode/s352601.html, Nguyen CN, Noy I (2019) Measuring the impact of insurance on urban earthquake recovery using nightlights. 2014). It has been shown that the damage of tropical cyclones increases non-linearly with wind speed and occurs only above a certain threshold. Abstract. 7. Natural Hazard-Induced Disasters and Production Efficiency: Moving Closer to or Further from the Frontier? This importance for the sectoral composition was already demonstrated by Bulte etal. Appendix Table 43 and 54 show that the results remain qualitatively unchanged. It asks for less input from the wholesale, retail trade, restaurants, hotels and mining and utilities sector aggregates, which results from a supply shock in the agricultural sector. Based on damage estimates from EM-DAT, the authors find a negative effect for the agricultural and a positive effect for the industrial sector. 2013). To allow for the possibility of multiple tropical cyclones per year and country, I conduct two robustness tests. 2012). Torrential rainfall can cause serious in-land flooding, thereby augmenting the risk coming from storm surges (Terry 2007). Hence, I interpolate the data to generate yearly observations. (2018). The sum of these exposure weights \(w_{g,t-1}\) is divided by the total sum of the weights \(W_{i,t-1}\) in country i in period \(t-1\). The new climate-economy literature. Future weather. By calculating the annual sectoral GDP per capita growth rate, I lose the first year of observation of the panel. Am Econ J Appl Econ 8(2):123153, Guha-Sapir D, CRED (2020) EM-DAT: the emergency events database. The agriculture, hunting, forestry, and fishing sector aggregate first depicts negative growth rates but then quickly recovers after four years. 2019; Cole etal. Part of Springer Nature. I expand their approach by not looking at overall GDP but at disaggregated GDP responses for seven sectoral aggregates. eSwatini also experienced rainfall.. See the CLIMADA manual for furher details on the methods used https://github.com/davidnbresch/climada/blob/master/docs/climada_manual.pdf. Furthermore, one can argue that only countries exposed to tropical cyclones are relevant for this analysis; therefore, Table 36 provides a regression of the main result for exposed countries only. 2012), recent empirical studies focus on the shock propagation in production networks within the United States of America (Barrot & Sauvagnat 2016) or after single natural disasters, such as the 2011 earthquake in Japan (Boehm etal. However, one disadvantage of the EORA26 data set is that parts of the data are estimated and not measured. For the dynamic analysis, the panel length is 65years, and for the InputOutput regression, it comprises 20years. It demands more input from three other sector aggregates, while the manufacturing sectors use less input from it. Direct negative impacts can result from the destruction of productive capital, infrastructure, or buildings, and thereby can generate a negative income shock for the whole economy (Kousky 2014). Nevertheless, it unveils the importance of the manufacturing sectors, as already demonstrated by their strong intersectoral connection in Fig. Econ J 122(559):6491, Dell M, Jones BF, Olken BA (2014) What do we learn from the weather? Furthermore, a shortage in the labor force can lead to a wage increase, which can serve as an incentive for workers from other regions to migrate to the affected region, also leading to a positive effect (Hallegatte and Przyluski 2010).

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