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Economic impact of natural disasters, spillovers, and role of human development: case of Indonesia

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  • Esa Azali Asyahid

    (Universitas Gadjah Mada)

  • Immanuel Satya Pekerti

    (Universitas Gadjah Mada)

Abstract

We investigate how natural disaster damages affect regional economic growth and their spatial spillover effect in various human development (HDI) level settings by utilising a panel annual district-level dataset from Indonesia. We employ Spatial Durbin Model to achieve these objectives. We find that disaster damage to houses has a negative effect on district-level per capita output growth. Meanwhile, the effect of disaster damage to people on economic growth depends on their HDI level, with low-HDI districts affected negatively and high-HDI districts positively. Our analysis also finds spatial spillover effects on neighbouring regions’ growth, and heterogeneous effects across economic sectors.

Suggested Citation

  • Esa Azali Asyahid & Immanuel Satya Pekerti, 2022. "Economic impact of natural disasters, spillovers, and role of human development: case of Indonesia," Letters in Spatial and Resource Sciences, Springer, vol. 15(3), pages 493-506, December.
    • Handle: RePEc:spr:lsprsc:v:15:y:2022:i:3:d:10.1007_s12076-022-00307-7
    DOI: 10.1007/s12076-022-00307-7
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    More about this item

    Keywords

    Natural disaster; Regional economic growth; Indonesia; Spatial Durbin model;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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