Natural Disasters and Regional Development - the Case of Earthquakes

35 Pages Posted: 21 Feb 2019

See all articles by Marius Fabian

Marius Fabian

Technology University of Braunschweig - Carl-Friedrich-Gauß-Fakultät

Christian Lessmann

Technology University of Braunschweig; Ifo Branch Dresden; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Tim Sofke

Technology University of Braunschweig - Carl-Friedrich-Gauß-Fakultät

Date Written: 2019

Abstract

We analyze the impact of earthquakes on nighttime lights at a sub-national level, i.e. on grids of different size. We argue that existing studies on the impact of natural disasters on economic development have several important limitations, both at the level of the outcome variable – usually national income or growth – as well as on the level of the independent variable, e.g. the timing of an event and the measuring of its intensity. We aim to overcome these limitations by using geophysical event data on earthquakes together with satellite nighttime lights. Using panel fixed effects regressions covering the entire world for the period 1992-2013 we find that earthquakes reduce both light growth rates and light levels significantly. The effects are persistent for approximately 5 years, but we find no long run effects. The effects are strong and robust in a small grid and gets weaker the larger the unit of observation. National institutions and economic conditions are relevant mediating factors.

Keywords: natural disasters, earthquakes, event data, satellite nighttime lights, luminosity, grid data, institutions, growth, development

JEL Classification: O440, Q540

Suggested Citation

Fabian, Marius and Lessmann, Christian and Sofke, Tim, Natural Disasters and Regional Development - the Case of Earthquakes (2019). CESifo Working Paper No. 7511, Available at SSRN: https://ssrn.com/abstract=3338918

Marius Fabian (Contact Author)

Technology University of Braunschweig - Carl-Friedrich-Gauß-Fakultät ( email )

Abt-Jerusalem-Str. 7
Braunschweig, D-38106
Germany

Christian Lessmann

Technology University of Braunschweig ( email )

Abt-Jerusalem-Str. 7
Braunschweig, D-38106
Germany

Ifo Branch Dresden ( email )

Poschinger Str. 5
Munich, 01069
Germany

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

Poschinger Str. 5
Munich, 01069
Germany

Tim Sofke

Technology University of Braunschweig - Carl-Friedrich-Gauß-Fakultät ( email )

Abt-Jerusalem-Str. 7
Braunschweig, D-38106
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
69
Abstract Views
499
rank
410,389
PlumX Metrics