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Natural disasters and regional development – the case of earthquakes

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  • Fabian, Marius
  • Lessmann, Christian
  • Sofke, Tim

Abstract

We analyze the impact of earthquakes on nighttime lights at a sub-national level, i.e., on grids of different size. We argue that existing studies on the impact of natural disasters on economic development have several important limitations, both at the level of the outcome variable as well as at the level of the independent variable, e.g., the timing of an event and the measuring of its intensity. We aim to overcome these limitations by using geophysical event data on earthquakes together with satellite nighttime lights. Using panel fixed effects regressions covering the entire world for the period 1992–2013, we find that earthquakes reduce both light growth rates and light levels significantly. The effects persist for approximately 5 years, but we find no long-run effects. Effects are stronger the smaller the area of a unit of observation. National institutions and economic conditions are relevant moderating factors.

Suggested Citation

  • Fabian, Marius & Lessmann, Christian & Sofke, Tim, 2019. "Natural disasters and regional development – the case of earthquakes," Environment and Development Economics, Cambridge University Press, vol. 24(5), pages 479-505, October.
    • Handle: RePEc:cup:endeec:v:24:y:2019:i:05:p:479-505_00
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    References listed on IDEAS

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    1. Felbermayr, Gabriel & Gröschl, Jasmin, 2014. "Naturally negative: The growth effects of natural disasters," Journal of Development Economics, Elsevier, vol. 111(C), pages 92-106.
    2. Felbermayr, Gabriel & Gröschl, Jasmin, 2013. "Natural disasters and the effect of trade on income: A new panel IV approach," European Economic Review, Elsevier, vol. 58(C), pages 18-30.
    3. Barone, Guglielmo & Mocetti, Sauro, 2014. "Natural disasters, growth and institutions: A tale of two earthquakes," Journal of Urban Economics, Elsevier, vol. 84(C), pages 52-66.
    4. Eduardo Cavallo & Sebastian Galiani & Ilan Noy & Juan Pantano, 2013. "Catastrophic Natural Disasters and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1549-1561, December.
    5. Felbermayr, Gabriel & Gröschl, Jasmin & Sanders, Mark & Schippers, Vincent & Steinwachs, Thomas, 2018. "Shedding Light on the Spatial Diffusion of Disasters," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181556, Verein für Socialpolitik / German Economic Association.
    6. Dave Donaldson & Adam Storeygard, 2016. "The View from Above: Applications of Satellite Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 171-198, Fall.
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    Cited by:

    1. Richard S. J. Tol, 2022. "State capacity and vulnerability to natural disasters," Chapters, in: Mark Skidmore (ed.), Handbook on the Economics of Disasters, chapter 20, pages 434-457, Edward Elgar Publishing.
    2. Ilari Määttä & Thomas Ferreira & Christian Leßmann, 2022. "Nighttime lights and wealth in very small areas: [Nachtlichter und Wohlstand in Kleinräumigen Daten:]," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 42(2), pages 161-190, August.
    3. Katarzyna Anna Bilicka & André Seidel, 2022. "Measuring Firm Activity from Outer Space," CESifo Working Paper Series 9701, CESifo.
    4. Dodlova, Marina & Carias, Michelle Escobar & Grimm, Michael, 2023. "The Effects of the 2010 Haiti Earthquake on Children's Nutrition and Education," IZA Discussion Papers 16195, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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