Economic Impact Of Natural Disasters Research Articles

Social Justice and Economic Sustainability: The Mitigation Role of Islamic Economics Against Natural Disasters

This article discusses the role of Islamic economic mitigation in achieving social justice and economic sustainability in the context of natural disasters. The main focus of this research is how the principles and instruments of Islamic economics, such as zakat, infaq, alms, waqf, andIslamic microfinance institutionscan be used to reduce the social and economic impact of natural disasters. Islamic economics, based on the principles of social justice and redistribution of wealth, offers a holistic and sustainable approach to dealing with disasters. These instruments are capable of providing immediate and effective assistance, as well as supporting long-term rehabilitation and development programs. This research uses a descriptive analysis method with a library research approach. The research results show that Islamic economics not only functions as an economic system, but also as a mechanism for achieving social justice and economic sustainability, which can significantly increase society's resilience to future disasters. This paper emphasizes that the application of Islamic economic principles can be an effective and sustainable solution in dealing with the macroeconomic impacts of natural disasters.

Economic Impact of Natural Disasters Under the New Normal of Climate Change: The Role of Green Technologies

Economic Impact of Natural Disasters Under the New Normal of Climate Change: The Role of Green Technologies

The lack of property rights can make natural disasters worse: The case of small-scale fisheries in Chile

Developing countries tend to suffer the most from natural disasters, but the mechanisms underlying this outcome are poorly understood. In this paper, I study one of the potential mechanisms behind this pattern: the lack of strong and well-defined property rights for renewable resources. Using fisheries as an example, I examine how different property rights regimes dictating who has access to the resource could determine the overall exposure, as well as the cost of the rebuilding paths that fishers follow after a natural disaster. Using small-scale fisheries in Chile as a case study, I show that fisheries operating in common access are on average more exposed and also follow costlier recovery paths after the tsunami that hit the country in 2010. This paper contributes to the ongoing work on the economic impact of natural disasters and provides an argument for further study of how institutional regimes can be also understood as potential adaptation strategies.

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

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

The Local Economic Impact of Natural Disasters

We use county panel data to study the dynamic responses of local economies after natural disasters in the U.S. Specifically, we estimate disaster impulse response functions for personal income per capita and a broad range of other economic outcomes, using a panel version of the local projections estimator. In contrast to some recent cross-country studies, we find that disasters increase total and per capita personal income over the longer-run (as of 8 years out). The effect is driven initially largely by a temporary employment boost and in the longer run by an increase in average weekly wages. We then assess the heterogeneity of disaster impacts across several dimensions. We find that the longer-run increase in income per capita rises with disaster severity, as measured by monetary damages. Hurricanes, tornados, and fires yield longer run increases in income, while floods do not. The longer run increase in income tends to rise with recent disaster experience and is absent for counties with no recent experience. Finally, a spatial spillover analysis suggests that, while over the short- to medium-run, the regional and local impacts of disasters on personal income are similar, over the longer run the net regional effect may be negative, in contrast to the positive local effect.

Application of Geographic Information Systems (GIS) for Measuring the Impact Income Vulnerability on Rural Households: A Case Study of the 2010 Floods in Pakistan

While the economic impact of natural disasters has been studied extensively, there are rather few studies that have addressed their impact on household income. This research tries to fill this gap by analyzing their actual effect on household income caused by the 2010 floods. We look at the impact of natural disasters on rural households in Pakistan after a massive flooding event in 2010. We used the difference-in-difference (DID) approach, which showed statistical significance at 1 percent. We also calculated the household distance from the rivers to see how vulnerable household income is to such kinds of shock-like floods. The results showed that the sample households living near had more impact as compared to the ones living far. Stata and Geographical Information System (GIS) software packages have been used for regression analysis and calculation of distance, respectively. This research will not only give insight in order to understand household income losses but will allow government, policymakers, and International Aid agencies to plan, make countermeasure strategies before designing post-disaster projects. After taking into account the effect of floods, which tend to have far more impact on the households, which are located near the source of the flooding. In this case, they need to focus more in terms of reconstruction of infrastructure, particularly for the households which are near these flooded areas. Firstly, this finding can give policymakers insight in terms of strategies to develop agriculture and non-agriculture employment opportunities. Secondly, it is essential to reduce income vulnerability and improve rural household finance economic conditions.

How to Integrate Labor Disruption into an Economic Impact Evaluation Model for Postdisaster Recovery Periods.

Evaluating the economic impacts caused by capital destruction is an effective method for disaster management and prevention, but the magnitude of the economic impact of labor disruption on an economic system remains unclear. This article emphasizes the importance of considering labor disruption when evaluating the economic impact of natural disasters. Based on the principle of disasters and resilience theory, our model integrates nonlinear recovery of labor losses and the demand of labor from outside the disaster area into the dynamic evaluation of the economic impact in the postdisaster recovery period. We exemplify this through a case study: the flood disaster that occurred in Wuhan city, China, on July 6, 2016 (the "7.6 Wuhan flood disaster"). The results indicate that (i) the indirect economic impacts of the "7.6 Wuhan flood disaster" will underestimate 15.12% if we do not consider labor disruption; (ii) the economic impact in secondary industry caused by insufficient labor forces accounts for 42.27% of its total impact, while that in the tertiary industry is 36.29%, which can cause enormous losses if both industries suffer shocks; and (iii) the agricultural sector of Wuhan city experiences an increase in output demand of 0.07% that is created by the introduction of 50,000 short-term laborers from outside the disaster area to meet the postdisaster reconstruction need. These results provide evidence for the important role of labor disruption and prove that it is a nonnegligible component of postdisaster economic recovery and postdisaster reduction.

Economic Impact of Natural Disasters: An Empirical Re-examination

Natural disasters cause serious economic and human losses. Yet there remains ambiguity in the existing literature with regard to their impact on the economy at large. This study re-examines the relationship between natural disasters and economic growth. It aims to contribute to a fairly limited literature on the economy-wide and sector-specific consequences of natural disasters in the short-to-medium term (up to 5 years). Further, it examines whether the disaster impacts are dependent on a country’s level of development. Based on panel data consisting of 102 (29 developed and 73 developing) countries over the period 1981–2015, it looks at the growth effects of four types of natural disasters, namely, floods, droughts, storms and earthquakes that were explored using the system generalised method of moments (GMM) approach. The results indicate that natural disasters have diverse economic impacts across economic sectors depending on disaster types and their intensity. The study confirms the findings of previous studies that the economic impacts of natural disasters are statistically stronger in developing countries. These findings may stimulate the policymakers especially in developing countries to explore the efficacy of viable ex-ante disaster risk financing tools (such as insurance, micro-insurance and catastrophic bonds). This would not only safeguard population and physical assets but also ensure adherence to the sustainable development goals. JEL Classification: Q54, O10

Comparing the Economic Impact of Natural Disasters Generated by Different Input-Output Models: An Application to the 2007 Chehalis River Flood (WA).

Due to the concentration of assets in disaster-prone zones, changes in risk landscape and in the intensity of natural events, property losses have increased considerably in recent decades. While measuring these stock damages is common practice in the literature, the assessment of economic ripple effects due to business interruption is still limited and available estimates tend to vary significantly across models. This article focuses on the most popular single-region input-output models for disaster impact evaluation. It starts with the traditional Leontief model and then compares its assumptions and results with more complex methodologies (rebalancing algorithms, the sequential interindustry model, the dynamic inoperability input-output model, and its inventory counterpart). While the estimated losses vary across models, all the figures are based on the same event, the 2007 Chehalis River flood that impacted three rural counties in Washington State. Given that the large majority of floods take place in rural areas, this article gives the practitioner a thorough review of how future events can be assessed and guidance on model selection.

The Economic Impact of Natural Disasters in Pacific Island Countries: Adaptation and Preparedness

Pacific island countries are highly vulnerable to various natural disasters which are destructive, unpredictable and occur frequently. The frequency and scale of these shocks heightens the importance of medium-term economic and fiscal planning to minimize the adverse impact of disasters on economic development. This paper identifies the intensity of natural disasters for each country in the Pacific based on the distribution of damage and population affected by disasters, and estimates the impact of disasters on economic growth and international trade using a panel regression. The results show that “severe” disasters have a significant and negative impact on economic growth and lead to a deterioration of the fiscal and trade balance. We also find that the negative impact on growth is stronger for more intense disasters. Going further this paper proposes a simple and consistent method to adjust IMF staff’s economic projections and debt sustainability analysis for disaster shocks for the Pacific islands. Better incorporating the economic impact of natural disasters in the medium- and long-term economic planning would help policy makers improve fiscal policy decisions and to be better adapted and prepared for natural disasters.

The Economic Impact of Natural Disasters in Pacific Island Countries: Adaptation and Preparedness

Pacific island countries are highly vulnerable to various natural disasters which are destructive, unpredictable and occur frequently. The frequency and scale of these shocks heightens the importance of medium-term economic and fiscal planning to minimize the adverse impact of disasters on economic development. This paper identifies the intensity of natural disasters for each country in the Pacific based on the distribution of damage and population affected by disasters, and estimates the impact of disasters on economic growth and international trade using a panel regression. The results show that 'severe' disasters have a significant and negative impact on economic growth and lead to a deterioration of the fiscal and trade balance. We also find that the negative impact on growth is stronger for more intense disasters. Going further this paper proposes a simple and consistent method to adjust IMF staff's economic projections and debt sustainability analysis for disaster shocks for the Pacific islands. Better incorporating the economic impact of natural disasters in the medium- and long-term economic planning would help policy makers improve fiscal policy decisions and to be better adapted and prepared for natural disasters.

Applicability of a spatial computable general equilibrium model to assess the short-term economic impact of natural disasters

ABSTRACTComputable general equilibrium (CGE) models have been widely used to assess the economic impact of natural disasters, but the models have not been fully validated by applying them to real disasters. This study focuses on validating a model for use in a short-run case in which the functional recovery of infrastructure and businesses occurred on a time scale of a few months. A special attempt is made to determine the parameter values of elasticity of substitutions, which play an important role in the effect on supply chains. In this study, a spatial CGE model, in which Japan is divided into nine regions, is constructed and applied to the case of the 2011 Great East Japan Earthquake and Tsunami. Through this application, the best estimates of the elasticity parameters generated relatively consistent estimates of production change compared with the observed change, both in severely affected regions and in other regions.

Stationarity of major flood frequencies and heights on the Ba River, Fiji, over a 122‐year record

ABSTRACTThe economic impact of natural disasters on developing economies can be severe with the recovery diverting scarce funds that might otherwise be targeted at development projects and stimulating the need for international aid. In view of the likely sensitivity of low‐lying Pacific Islands to anticipated changes in climate, a 122‐year record of major flooding depths at the Rarawai Sugar Mill on the Ba River in the northwest of the Fijian Island of Viti Levu is analysed. Reconstructed largely from archived correspondence of the Colonial Sugar Refining Company, the time series comprises simple measurements of height above the Mill floor. It exhibits no statistically significant trends in either frequency or flood heights, once the latter have been adjusted for average relative sea‐level rise. This is despite persistent warming of air temperatures as characterized in other studies. There is a strong dependence of frequency (but not magnitude) upon El Niño‐Southern Oscillation (ENSO) phase, with many more floods in La Niña phases. The analysis of this long‐term data series illustrates the difficulty of detecting a global climate change signal from hazard data, even given a consistent measurement methodology (cf HURDAT2 record of North Atlantic hurricanes) and warns of the strong dependence of any statistical significance upon choices of start and end dates of the analysis.

The main costs of natural disasters in the Forest District of Węgierska Górka

Abstract The aim of the study was to determine the impact of increased forest management due to natural disasters on particular core unit costs. We analysed the direct costs for the Forest District of Węgierska Górka in the years 2004-2010 based on information from the State Forests lnformation System (SFIS) database compared with selected forest districts within the Regional Directorate of State Forests in Cracow (RDSF). The forest districts were divided into two groups with two and six forest districts and confidence intervals around the mean were determined and the significance of linear regressions of the considered characteristics was tested. Additionally, the growth rate (decrease) of the unit cost was calculated. Our studies showed that natural disasters affect only certain unit costs regardless of the intensity of the forest management. The increase in unit costs resulted in economic losses in forest management. A full long-term analysis of the economic impact of natural disasters should be done, taking into account the cost of reforestation of destroyed areas which may become apparent only some years later.

The economic impact of extreme weather events through a Kaleckian–Post-Keynesian lens: A case study of the State of Queensland, Australia

The economic impact of natural disasters has been neglected in the mainstream theories of development and economic growth. Only recently has a body of research into the economic effects of natural disasters begun to emerge. This recent research has taken into account the socio-economic impact of disasters, and has explored the influence of the pre-disaster socio-economic structure on the response to a disaster event when it occurs. However, a great deal of research fails to effectively examine this relationship within a general macroeconomic framework. In the absence of such attempts, this article aims to explore the dynamic effects of climatic disasters on key economic variables in the State of Queensland for the period of 2002 to 2011. The paper draws on the principles of a Kaleckian–Post-Keynesian multi-sectoral open economy theory, using powerful time series analysis and estimation techniques. Assuming natural disasters to be exogenous random shocks, this paper explores whether macroeconomic variables in the model differ significantly in their response to extreme climatic shocks.

Analysis of Economic Resiliency of Communities Affected by Natural Disasters: The Bay Area Case Study

The paper focuses on the economic impact of natural disasters on different economic sectors in a given community considering their interdependencies. In the last twenty years, several catastrophe models have been developed for measuring economic losses. Nevertheless, due to the lack of data and the complexity of the problem, significant levels of uncertainties are still present. In fact, the factors that drive the economic recovery process before, during, and after natural disasters needs to be determined to select the optimal resources allocation and preparedness measures right after an extreme event. In most of the previous catastrophe models interdependencies between physical and nonphysical infrastructures are mostly neglected. This paper is proposing a model that describes the economic effects and characteristics that should be taken into account to predict the monetary impact of natural disasters, focusing in particular on the economic interdependencies of industries and lifelines. Different types of losses are considered using real economic data provided by surveys on natural disasters such as Northridge earthquake, Des Moines flood, etc. The data associated with the physical damages are obtained from HAZUS database. The Economic Resilience Index provided in the PEOPLES framework is adopted and applied to the specific case study of the San Francisco Bay Area. Sensitivity analysis is performed for each economic sector considered in the analysis.

Natural Disasters in Latin America and the Caribbean: An Overview of Risk

This paper integrates information from both economics and the physical sciences to survey the effects of natural disasters in the region. A first section surveys the human and economic impact of natural disasters in the region at both the household and aggregate levels, noting both the geographical distribution of disaster risk and its long-term implications for development. A second section reviews types of disasters prevalent in the region, and future disaster risks, as well as the socio-economic sources of vulnerability to disasters resulting from development and migration patterns. A third section discusses risk management strategies at the household and community level, with public policy options and proposals for emergency response and finding an appropriate mix of local, national and market-based solutions.

Measuring long-run economic effects of natural hazard

This paper studies the long-run economic effects of severe weather on regional economies. A catastrophic event, such as a hurricane, will have an effect on both the directly impacted region and adjacent regions. With dramatically increasing damage from catastrophic weather events over the past few decades, comprehensive assessment of the long-run economic impact of natural disasters across the broader region becomes more important than ever for planning for post-disaster recovery. We estimate the long-run effect of Hurricane Katrina on the unemployment rate of Houston, TX by employing time-series and fixed-effect models. Using Dallas as a control, we find that Katrina is associated with a higher long-run unemployment rate in Houston than would otherwise have been expected. This implies that the hurricane-generated adverse relative effects on Houston. Our findings suggest that areas that are geographically proximate to the directly impacted region can sustain lasting negative economic consequences.

Economic impact of natural disasters' fatalities

PurposeThe purpose of this paper is to find the meaningful relationship between the economic impact of the natural disaster and economic condition.Design/methodology/approachThe paper employed cross‐sectional analysis to investigate the relationship between economic condition namely, gross domestic product per capita (GDPpc); gross domestic product per capita squared (GDPpc2); government consumption ratio to GDP (gc); ratio of M2 over GDP(M2); years of schooling attainment (sc); land area and finally; population and the economic impact of natural disasters, whereby ten types of natural disasters were chosen. The degree to which the human and economic losses due to these ten natural disasters were measured by, the variables selected are, number of killed; total affected; and ratio of total damage to GDP. Three different points of time were regressed, namely, 1985, 1995, and 2005 covering 73 countries.FindingsResults clearly indicate that there seems to be meaningful relationship between the economic impact of natural disasters and economic conditions.Practical implicationsThe paper provides some evidence on the important role of economic condition in minimizing the impact of natural disasters.Originality/valueThe paper incorporates a comprehensive list of explanatory variables in accounting for natural disaster fatalities.

Disasters, Climate Change and Economic Development in Sub-Saharan Africa: Lessons and Directions

This paper explores the links among natural disasters, climate change, and economic development. It attempts to outline a framework for thinking about these links. The paper summarizes the limited knowledge of the long-term economic impact of natural disasters. It is necessary to draw links among disasters, conflicts, resource management, and other transmission channels to develop an appropriate response to natural disasters. The paper argues that African governments, along with their development partners, need to develop a more robust adaptation and response capability to disasters as part of their overall development planning. The paper makes the case for more market-based financing mechanisms than have been used hitherto and for an emphasis on forecasting research. It also argues for more work on the links between climate change and disasters and a new way of looking at disaster resilience as a continuum to development strategies.