Macroeconomics of Natural Disasters: Strengths and Weaknesses of Meta‐Analysis Versus Review of Literature

We use the case of the macroeconomic impact of natural disasters to analyze strengths and weaknesses of meta‐analysis in an emerging research field. Macroeconomists have published on this issue since 2002 (we identified 60 studies to date). The results of the studies are contradictory and therefore the need to synthesize the available research is evident. Meta‐analysis is a useful method in this field. An important aim of our article is to show how one can use the identified methodological characteristics to better understand the robustness and importance of new findings. To provide a comparative perspective, we contrast our meta‐analysis and its findings with the major influential research synthesis in the field: the IPCC's 2012 special report Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation. We show that the IPCC could have been more confident about the negative economic impact of disasters and more transparent on inclusion and qualification of studies, if it had been complemented by a meta‐analysis. Our meta‐analysis shows that, controlling for modeling strategies and data set, the impact of disasters is significantly negative. The evidence is strongest for direct costs studies where we see no difference between our larger sample and the studies included in the IPCC report. Direct cost studies and indirect cost studies differ significantly, both in terms of the confidence that can be attached to a negative impact of natural disasters and in terms of the sources of heterogeneity of the findings reported in the primary studies.