Shedding Light on the Spatial Diffusion of Disasters

71 Pages Posted: 28 Aug 2018

See all articles by Gabriel J. Felbermayr

Gabriel J. Felbermayr

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Jasmin Gröschl

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Mark Sanders

Utrecht University - School of Economics

Vincent Schippers

Utrecht University - School of Economics

Thomas Steinwachs

CESifo (Center for Economic Studies and Ifo Institute), Ifo Institute, Students

Date Written: July 09, 2018

Abstract

Climate research suggests that global warming will lead to more frequent and more extreme natural disasters. Most disasters are local events with effects on local economic growth. Hence, assessing their economic impacts with the help of econometric country-level analysis may lead to biased results. Moreover, correct identification is further complicated by the possibility that local shocks shift production and consumption to neighboring locations. In this paper, annual night-time light emission data covering about 24,000 grid cells for the years 1992-2013 are matched to geocoded information on meteorological and geological events. Spatial econometric panel methods are applied to account for interdependencies between locations. Interpreting variation in light emissions as reflecting changes in economic activity, findings convey evidence for pronounced local average treatment effects and strong spatial spillovers, particularly for weather shocks. In particular, results suggest that spatial shifts of economic activity after a natural disaster are a rather local phenomenon, stressing the importance of local adaptation policies. Moreover, substantial heterogeneity across income groups and regions is identified.

Keywords: natural disaster and weather shocks, night light emission, growth, spatial spillovers, grid cell analysis

JEL Classification: F150, O180, O440, Q540, R120

Suggested Citation

Felbermayr, Gabriel J. and Groeschl, Jasmin and Sanders, Mark and Schippers, Vincent and Steinwachs, Thomas, Shedding Light on the Spatial Diffusion of Disasters (July 09, 2018). CESifo Working Paper Series No. 7146, Available at SSRN: https://ssrn.com/abstract=3237340

Gabriel J. Felbermayr

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Jasmin Groeschl (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Mark Sanders

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands

Vincent Schippers

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, +31 30 253 7373 3584 EC
Netherlands

Thomas Steinwachs

CESifo (Center for Economic Studies and Ifo Institute), Ifo Institute, Students ( email )

Poschinger Str. 5
Munich
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
49
Abstract Views
436
PlumX Metrics