Understanding the Impact of Windstorms on Economic Activity from Night Lights in Central America
Central America is particularly prone to tropical storms and hurricanes. The prevailing conditions of poverty and socioeconomic inequality in most countries of the region make their exposed population especially vulnerable to those adverse natural...
| Main Authors: | , , |
|---|---|
| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/338881498577038860/Understanding-the-impact-of-windstorms-on-economic-activity-from-night-lights-in-Central-America http://hdl.handle.net/10986/27627 |
| Summary: | Central America is particularly prone to
tropical storms and hurricanes. The prevailing conditions of
poverty and socioeconomic inequality in most countries of
the region make their exposed population especially
vulnerable to those adverse natural events. This paper
quantifies the causal effects of hurricane windstorms on
economic growth using night lights in the Central America
region at the highest spatial resolution data available (1
square kilometer). The paper uses a unique data set of
monthly night lights data to capture the temporal
disaggregation of hurricanes. Hurricanes in Central America
are often localized events and tend to make landfall during
the final months of the year that are better captured
through monthly -– rather than yearly -– frequency data. The
results suggest that major hurricanes show negative effects
up to 12 months after the hurricane strikes (between -2.6 to
-3.9 percent in income growth at the local level). After
that, the analysis finds positive effects during the second
year and the first half of the third year as evidence of
post-disaster recovery (from 2.5 to 3.6 percent in income
growth). The paper contributes to the literature on natural
disasters by providing robust estimates of the causal
effects of major hurricane windstorms on Central America,
which are negative (in the short term) and positive (two
years after hurricanes hit). |
|---|