Abstract

Natural disasters have large social and economic consequences. However, adequate economic and social data to study subnational economic effects of these negative shocks are typically hard to come by especially in low-income countries. For this reason, the use of night light data is becoming increasingly popular in studies that aim to estimate the impacts of natural disasters on local economic activity. However, it is often unclear what observed changes in night lights represent exactly. In this paper, we examine how changes in night light emissions following a severe hurricane relate with local population, employment, and income statistics. We do so for the case of Hurricane Katrina, which struck the coastline of Lousiana and Mississippi in August 2005. Hurricane Katrina is an excellent case for this purpose since it is one of the biggest hurricanes in recent history in terms of human and economic impacts, made landfall in a country with high-quality sub-national socioeconomic data collection, and is covered extensively in the academic literature. We find that overall night light changes reflect the general pattern of direct impacts of Katrina as well as indirect impacts and subsequent population and economic recovery. Our results suggest that change in light intensity is mostly reflective of changes in resident population and the total number of employed people within the affected area, and less so but positively related to aggregate income and real GDP.

Highlights

  • Natural disasters have large social and economic consequences around the world

  • The use of night light data is becoming increasing popular in studies that aim to estimate the impacts of natural disasters on local economic activity

  • We find that overall the night light changes reflect the general pattern of direct impacts of Katrina as well as the subsequent recovery

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Summary

Introduction

Natural disasters have large social and economic consequences around the world. Impacts of natural disasters are projected 15 to rise as a result of a combination of climate change increasing the frequency and/or severity of extreme weather events and continued urbanization in disaster-prone areas (IPCC, 2014). For many areas where natural disasters have large impacts, adequate data on local population and economic activity are not available For this reason, there is a growing literature that studies the local effects of natural disasters by making use of changes in local night light intensity (see e.g. Bertinelli and Strobl, 2013; Gillespie et al, 2014; Elliott et al, 2015; Zhao et al, 2018; Kocornik-Mina 20 et al, 2020). Our results show that the use of night light data for studying the immediate economic impact of a big natural disaster such as Hurricane Katrina is warranted Using these data in areas where alternative economic statistics at the desired level of geographical aggregation are absent may allow for studying the effects of shocks on regional economies. We assess the recovery in light intensity over the subsequent years, before turning to a comparison between economic impacts and effects on night light intensity

Hurricane Katrina: landfall and economic impacts
Visible impacts from space
Regional impacts and recovery in night lights
Population changes and night lights
Other indicators: employment, income, and GDP
Correlations between night lights and economic indicators
Discussion
Conclusions
Findings
Figures and Tables
Full Text
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