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The Impact of Tropical Storms on Households: Evidence from Panel Data on Consumption

Author

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  • Michael Henry
  • Nekeisha Spencer
  • Eric Strobl

Abstract

This paper investigates the impact of tropical storms on Jamaican household consumption. We build a panel data set that follows individual households over time thus enabling us to take account of time invariant household and location unobservables that could be correlated with mean tropical storm exposure. Our results show that while the average damaging hurricane reduces per capita consumption by approximately 1.1%, more destructive events can cause losses multiple times this amount. There are, however, heterogeneous impacts across households, where only those that live in buildings with less wind resistant walls are affected. Additionally, we find that households are able to partially buffer the negative impact on consumption through remittances and savings, as well as by shifting funds away from non‐regular expenditures. Again, households differ in the nature of this buffering according to the wind resistance of their buildings.

Suggested Citation

  • Michael Henry & Nekeisha Spencer & Eric Strobl, 2020. "The Impact of Tropical Storms on Households: Evidence from Panel Data on Consumption," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 1-22, February.
    • Handle: RePEc:bla:obuest:v:82:y:2020:i:1:p:1-22
    DOI: 10.1111/obes.12328
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    Cited by:

    1. Victor Hugo de Oliveira & Ines Lee & Climent Quintana-Domeque, 2023. "Natural Disasters and Early Human Development: Hurricane Catarina and Infant Health in Brazil," Journal of Human Resources, University of Wisconsin Press, vol. 58(3), pages 819-851.
    2. Mirza, Daniel & Stancanelli, Elena & Verdier, Thierry, 2022. "Household expenditure in the wake of terrorism: Evidence from high frequency in-home-scanner data," Economics & Human Biology, Elsevier, vol. 46(C).
    3. Paudel, Jayash, 2021. "Beyond the Blaze: The Impact of Forest Fires on Energy Poverty," Energy Economics, Elsevier, vol. 101(C).
    4. Nekeisha Spencer & Eric Strobl, 2022. "Poverty and hurricane risk exposure in Jamaica," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 47(1), pages 141-157, March.
    5. Matteo Coronese & Federico Crippa & Francesco Lamperti & Francesca Chiaromonte & Andrea Roventini, 2023. "Raided by the storm: how three decades of thunderstorms shaped U.S. incomes and wages," LEM Papers Series 2023/40, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    6. Yin, Zhichao & Yan, Yu & Chen, Xirong & Liu, Taixing, 2022. "Earthquake and household energy consumption – Evidence from the Wenchuan earthquake in China," Energy Economics, Elsevier, vol. 111(C).
    7. Jessie Ruth Schleypen & Charlotte Plinke & Tobias Geiger, 2024. "The Impacts of Multiple Tropical Cyclone Events and Associated Precipitation on Household Income and Expenditures," Economics of Disasters and Climate Change, Springer, vol. 8(2), pages 197-233, July.
    8. Lee, Chien-Chiang & Wang, Chih-Wei & Ho, Shan-Ju & Wu, Ting-Pin, 2021. "The impact of natural disaster on energy consumption: International evidence," Energy Economics, Elsevier, vol. 97(C).
    9. Paudel, Jayash, 2023. "Shaking things up: Do seismic shocks affect energy choices?," Energy Policy, Elsevier, vol. 172(C).
    10. Brei, Michael & Mohan, Preeya & Perez Barahona, Agustin & Strobl, Eric, 2024. "Transmission of natural disasters to the banking sector: Evidence from thirty years of tropical storms in the Caribbean," Journal of International Money and Finance, Elsevier, vol. 141(C).

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