Destruction, Disinvestment, and Death: Economic and Human Losses Following Environmental Disaster

86 Pages Posted: 19 Feb 2013  

Jesse Keith Anttila-Hughes

University of San Francisco

Solomon Hsiang

University of California, Berkeley; National Bureau of Economic Research

Date Written: February 18, 2013

Abstract

The immediate physical damages caused by environmental disasters are conspicuous and often the focus of media and government attention. In contrast, the nature and magnitude of post-disaster losses remain largely unknown because they are not easily observable. Here we exploit annual variation in the incidence of typhoons (West-Pacific hurricanes) to identify post-disaster losses within Filipino households. We find that unearned income and excess infant mortality in the year after typhoon exposure outnumber immediate damages and death tolls roughly 15-to-1. Typhoons destroy durable assets and depress incomes, leading to broad expenditure reductions achieved in part through disinvestments in health and human capital. Infant mortality mirrors these economic responses, and additional findings -- that only female infants are at risk, that sibling competition elevates risk, and that infants conceived after a typhoon are also at risk -- indicate that this excess mortality results from household decisions made while coping with post-disaster economic conditions. We estimate that these post-typhoon "economic deaths" constitute 13% of the overall infant mortality rate in the Philippines. Taken together, these results indicate that economic and human losses due to environmental disaster may be an order of magnitude larger than previously thought and that adaptive decision-making may amplify, rather than dampen, disasters' social cost.

Keywords: environment, development, disasters, infant, health, human capital, adaptation

JEL Classification: J13, O12, Q54, Q56

Suggested Citation

Anttila-Hughes, Jesse Keith and Hsiang, Solomon, Destruction, Disinvestment, and Death: Economic and Human Losses Following Environmental Disaster (February 18, 2013). Available at SSRN: https://ssrn.com/abstract=2220501 or http://dx.doi.org/10.2139/ssrn.2220501

Jesse Keith Anttila-Hughes (Contact Author)

University of San Francisco ( email )

2130 Fulton Street
San Francisco, CA 94117
United States

Solomon M. Hsiang

University of California, Berkeley ( email )

2607 Hearst Avenue
Berkeley, CA 94720-7320
United States

HOME PAGE: http://gspp.berkeley.edu/directories/faculty/solomon-hsiang

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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