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The Impact of Typhoons on Economic Activity in the Philippines: Evidence from Nightlight Intensity

Author

Listed:
  • Strobl, Eric

    (University of Bern)

Abstract

We quantify the economic impact of typhoons in the Philippines. To this end we construct a panel data set of local economic activity derived from nightlight intensity satellite images and a cell level measure of typhoon damage constructed from storm track data, a wind field model, and a stylized damage function. Our econometric results reveal that there is a statistically and potentially economically significant, albeit short- lived, impact of typhoon destruction on local economic activity. Constructing risk profiles from a 60-year historical set of storms suggests that (near) future losses in economic activity for frequent (5-year return period) and rare (50-year return period) events are likely to range from between 1.0% and 2.5%.

Suggested Citation

  • Strobl, Eric, 2019. "The Impact of Typhoons on Economic Activity in the Philippines: Evidence from Nightlight Intensity," ADB Economics Working Paper Series 589, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0589
    as

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    File URL: https://www.adb.org/publications/impact-typhoons-philippines
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    References listed on IDEAS

    as
    1. Eric Strobl, 2011. "The Economic Growth Impact of Hurricanes: Evidence from U.S. Coastal Counties," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 575-589, May.
    2. Christina Paxson & Cecilia Rouse, 2008. "Returning to New Orleans after Hurricane Katrina," Working Papers 1052, Princeton University, Department of Economics, Center for Economic Policy Studies..
    3. Loayza, Norman V. & Olaberría, Eduardo & Rigolini, Jamele & Christiaensen, Luc, 2012. "Natural Disasters and Growth: Going Beyond the Averages," World Development, Elsevier, vol. 40(7), pages 1317-1336.
    4. Andrea Leiter & Harald Oberhofer & Paul Raschky, 2009. "Creative Disasters? Flooding Effects on Capital, Labour and Productivity Within European Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(3), pages 333-350, July.
    5. repec:pri:cheawb:paxson_rouse_katrina_returns is not listed on IDEAS
    6. Christina Paxson & Cecilia Elena Rouse, 2008. "Returning to New Orleans after Hurricane Katrina," American Economic Review, American Economic Association, vol. 98(2), pages 38-42, May.
    7. repec:pri:indrel:dsp0173666450b is not listed on IDEAS
    8. Noy, Ilan & duPont IV, William, 2016. "The long-term consequences of natural disasters — A summary of the literature," Working Paper Series 4981, Victoria University of Wellington, School of Economics and Finance.
    9. repec:pri:cepsud:168rouse is not listed on IDEAS
    10. Christina Paxson & Cecilia Rouse, 2008. "Returning to New Orleans after Hurricane Katrina," Working Papers 1126, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
    11. Christina Paxson & Cecilia E. Rouse, 2008. "Returning to New Orleans after Hurricane Katrina," Working Papers 1043, Princeton University, Department of Economics, Industrial Relations Section..
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mathews, Shilpita & Surminski, Swenja & Roezer, Viktor, 2021. "The risk of corporate lock-in to future physical climate risks: the case of flood risk in England and Wales," LSE Research Online Documents on Economics 112801, London School of Economics and Political Science, LSE Library.
    2. Etienne Espagne & Y. B. Ha & Kenneth Houngbedji & Thanh Ngo-Duc, 2022. "Effect of typhoons on economic activities in Vietnam: Evidence using satellite imagery," Post-Print hal-03960254, HAL.
    3. Mathews, Shilpita & Surminski, Swenja & Roezer, Viktor, 2021. "The risk of corporate lock-in to future physical climate risks: the case of flood risk in England and Wales," LSE Research Online Documents on Economics 112807, London School of Economics and Political Science, LSE Library.
    4. Preeya Mohan & Eric Strobl, 2021. "The impact of tropical storms on tax revenue," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(3), pages 472-489, April.
    5. Arlan Brucal & Viktor Roezer & Denyse S. Dookie & Rebecca Byrnes & Majah-Leah V. Ravago & Faye Cruz & Gemma Narisma, 2020. "Disaster impacts and financing: Local insights from the Philippines," Department of Economics, Ateneo de Manila University, Working Paper Series 202015, Department of Economics, Ateneo de Manila University.
    6. Hazem Krichene & Thomas Vogt & Franziska Piontek & Tobias Geiger & Christof Schötz & Christian Otto, 2023. "The social costs of tropical cyclones," Nature Communications, Nature, vol. 14(1), pages 1-13, December.

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    More about this item

    Keywords

    economic impact; nightlights; Philippines; typhoons; wind field model;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • 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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