To allow for the possibility of multiple tropical cyclones per year and country, I conduct two robustness tests. Depending on the level of aggregation, I run 49 (7*7) or 676 (26*26) different regressions. Glob Environ Change 26:183195, Knapp KR, Kruk MC, Levinson DH, Diamond HJ, Neumann CJ (2010) The international best track archive for climate stewardship (IBTrACS). Springer, New York, London, Toya H, Skidmore M (2007) Economic development and the impacts of natural disasters. This index is then multiplied by the cubed maximum wind speed \(S(max)_{g,t}^{3}\) in grid g and year t as calculated by Eq. Climate change impacted Hurricane Florence's precipitation and size Generally speaking, the proposed models offer a simple but strong way for causal interpretation of the impact of tropical cyclones on sectoral growth. Bakkensen LA, Park D-SR, Sarkar RSR (2018) Climate costs of tropical cyclone losses also depend on rain. Observations were excluded if they were above the \((2k+2)/n\) threshold for leverage and above the 2/sqrt(n) threshold for dfbeta. This corresponds to a mean annual global loss of USD 16.7 billion (measured in constant 2005 USD) for the sample average. The situation is completely different in the wholesale, retail trade, restaurants, and hotels sector aggregate, where a negative influence can be observed over almost the entire 20-year period. Furthermore, the results of the randomization test show that the \(H_0\) of no effect of tropical cyclone damage can be rejected at the 1% and 5% level of confidence for the agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels sectors, respectively. \end{aligned}$$, $$\begin{aligned} Damage_{i,t}= \dfrac{\sum _{g \in i}w_{g,t-1}}{W_{i,t-1}}*\sum _{g \in i} S (max)_{g,t}^{3}\mathbb {1}_{S(max)>92}, \end{aligned}$$, $$\begin{aligned} IO_t^{j,k}=\frac{Input_t^{j,k}}{Total Input_t^j} \end{aligned}$$, $$\begin{aligned} Growth_{i,t-1->t}^j=\alpha ^j + \beta ^j * Damage_{i,t} +\gamma ^j*{\mathbf {Z}}_{i,t-1} + \delta _t^j + \theta _i^j + \mu _i^j*t + \epsilon _{i,t}^j, \end{aligned}$$, $$\begin{aligned} Growth_{i,t-1->t}^j= & {} \alpha ^j + \sum _{L=0}^{20}( \beta _{t-L}^j * Damage_{i,t-L}) +\gamma ^j*{\mathbf {Z}}_{i,t-1} \nonumber \\&+ \delta _t^j + \theta _i^j + \mu _i^j*t + \epsilon _{i,t}^j, \end{aligned}$$, $$\begin{aligned} IO_{i,t}^{j,k}= & {} \alpha ^{j,k} + \beta ^{j,k} * Damage_{i,t}+ \lambda ^{j,k}*IO_{i,t-1}^{j,k} +\gamma ^{j,k}*{\mathbf {Z}}_{i,t-1} \nonumber \\&+\,\delta _t^{j,k} + \theta _i^{j,k} + \mu _i^{j,k}*t + \epsilon _{i,t}^{j,k}, \end{aligned}$$, $$\begin{aligned} R = {\left\{ \begin{array}{ll} 30, &{} \text {if } L \leqq 24^\circ \\ 30 + 2.5*abs(L)-24, &{} \text {if } L> 24^\circ \\ 75, &{} \text {if } L > 42^\circ . However, these growth rates are simply not high enough to reach the pre-disaster growth path. 2014). Exposed countries are defined as having at least one positive damage observation over the sample period. Tropical Cyclone Eloise, which hit southeastern Africa in January 2021, caused widespread flooding and landslides, resulting in at least 21 deaths and. For example, Loayza etal. Gross value added is defined by the UNSD as the value of output less the value of intermediate consumption (United Nations Statistical Division 2015a). The error term \(\epsilon _{i,t}\) is clustered at the country level. J Econ Lit 52(3):740798, Dupor B (1999) Aggregation and irrelevance in multi-sector models. It remains unclear if there exists some key sector, which, if damaged, results in a negative shock for the other sectors. Therefore, I propose a new spatial exposure weight for the agricultural sector, namely agricultural land, which consists of the sum of land used for grazing and crops in \(\hbox {km}^{2}\) per grid cell. Econ Syst Res 25(1):2049, Lenzen M, Malik A, Kenway S, Daniels P, Lam KL, Geschke A (2019) Economic damage and spillovers from a tropical cyclone. 00:00 00:00 An unknown error has occurred I find a significantly negative influence of tropical cyclones on two sector aggregates including agriculture, as well as trade and tourism. 2019). Nevertheless, it unveils the importance of the manufacturing sectors, as already demonstrated by their strong intersectoral connection in Fig. Direct negative impacts can result from the destruction of productive capital, infrastructure, or buildings, and thereby can generate a negative income shock for the whole economy (Kousky 2014). I also checked for different lag lengths, but could hardly find any effect above a lag length of five years. 2 contains a description of the data source, introduces the construction of the tropical cyclone damage measure, and presents descriptive statistics. One major effort of this paper is to generate a new meaningful sectoral damage variable on a country-year level. The analysis of the past influences of tropical cyclone damage demonstrates that the sectoral growth response following a tropical cyclone is a complex undertaking. Furthermore, although the manufacturing sector shows no direct monetary damage, it is responsible for several changes in the production schemes of other sectors, leading to a monetary downturn in the mining and utilities (C&E) sectoral aggregate. On average, the sector aggregates agriculture, hunting, forestry, and fishing (A&B) and mining and utilities (C&E) are only slightly dependent on other sectors, while there is a stronger dependence for the remaining sectoral aggregates. 5. Such data are positively correlated with GDP (Felbermayr and Grschl 2014) and prone to measurement errors (Kousky 2014). The variables are measured in constant 2005 USD. Ecol Econ 107:333346, Le Cozannet G, Modaressi H, Pedreros R, Garcin M, Krien Y, Desramaut N (2013) Storm surges. Globally they are among the most destructive natural hazards. Tropical cyclones only lead to a small number of production process changes with coefficients being relatively small. However, the presented results are generalized for 205 countries at most, and every specific country should make an analysis of their specific vulnerability and individual exposure. 4.2 demonstrates, this effect may be driven by less demand from the manufacturing sectors. J Infrastruct Syst 7(1):112, Hallegatte S, Przyluski V (2010) The economics of natural disasters: concepts and methods. By calculating the annual sectoral GDP per capita growth rate, I lose the first year of observation of the panel. For the dynamic analysis, the panel length is 65years, and for the InputOutput regression, it comprises 20years. It is therefore important to examine their effects over time (Felbermayr and Grschl 2014; Hsiang and Jina 2014). Barrot J-N, Sauvagnat J (2016) Input specificity and the propagation of idiosyncratic shocks in production networks. In response to this, numerous studies of databases1 from around the world have been undertaken to examine the factors responsible for this increase. Therefore, I re-estimate the results of Eqs. Cyclone Nivar : A cyclone is a general term for a weather system in which winds rotate inwardly to an area of low atmospheric pressure. First, I only use the damage fraction due to maximum wind speed of tropical cyclones. 2014). The radius of maximum wind (R, in km) is related to the latitude (L) of the respective raw data tropical cyclone position in the following way: Since the tropical cyclone data are available at global coverage since 1950, I will extend my database later for further specifications. World Dev 21(9):14171434, Angrist JD, Pischke J-S (2009) Mostly harmless econometrics: an empiricists companion. Hsiang (2010) also finds the largest negative effects of tropical cyclones for the agricultural sector aggregate, while Loayza etal. These surges, sometimes called tidal waves, can drown people and animals, and are often the greatest killers in a cyclone. B.E. Circle diameter is proportional to the average sectoral share on total GDP. To deal with this problem, I will re-estimate my regression models with Newey and West (1987) as well as spatial HAC standard errors (Hsiang 2010; Fetzer 2020), which allow for a temporal correlation of 10years and a spatial correlation of 1000 kilometer radius.Footnote 20. Furthermore, I cluster the standard errors at broader regional levels to account for the event that tropical cyclones can also affect neighboring countries within one region.Footnote 31 Additionally, I control for the yearly tropical cyclone frequency per year, I test a different damage variable (mean instead of maximum cubed wind speed per year), and include tropical cyclone basin fixed-effects in further robustness tests. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. These factors are a decrease in the forward speed of a storm, increased intensity, and more water vapor in the atmosphere. The tests are conducted with the STATA command parmest (Newson 1998). Originating from a tropical wave over West Africa, Florence quickly organized upon its emergence over the Atlantic Ocean. 2019; Cole etal. 4. The South Pacific has recently been hit by particularly destructive cyclones like Winston and Pam. Additionally, Cole etal. However, little is known about the empirical InputOutput effects across broader sectors after a natural disaster shock. Sept. 16: Some areas receive as much as 34 inches of rain from Sept. 13 to Sept. 16. I show that tropical cyclones have a significantly negative impact on the annual growth rate of two sectoral aggregates: agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels. The analysis is conducted on a country-year level. The largest negative impacts can be attributed to the annual growth in the agriculture, hunting, forestry, and fishing sector aggregate, where a standard deviation increase in tropical cyclone damage is associated with a decrease of 262 percentage points of the annual sectoral growth rate. The start of the arrow shows the input, and the end denotes the respective output. Further details on the data on tropical cyclones can be found in Appendix A.1. This is a well-established method (Strobl 2012; Heinen etal. Thus, tropical cyclones are and will continue to be a serious threat to the life and assets of a large number of people worldwide. I decide not to use the WIOD database because its country sample is not very exposed to tropical cyclones. Additionally, a new damage measure is developed that considers the varying levels of exposure of different sectors. Since the EORA26 database also offers the data decomposed for 26 sectors, this section demonstrates the results of model 6 in more detail. volume78,pages 545569 (2021)Cite this article. To underline the credibility of my regression analyses, I test the sensitivity of my results in various ways. Moreover, extreme damaging tropical cyclones are relatively rare. Perhaps the most challenging task is to identify critical sectors that may be responsible for widespread spillover effects leading to substantial modifications in other sectors production input schemes. PLoS ONE 14(4):121, Strobl E (2011) The economic growth impact of hurricanes: Evidence from U.S. coastal counties. The storm started to form as the result of an area of low pressure over Western Africa. Pictured: The East Coast of the U.S. and the Gulf of Mexico viewed by satellite as Hurricane Florence made landfall on September 14. Hence, I interpolate the data to generate yearly observations. When water changes from a liquid to a gas, it absorbs heat, and when it changes from a gas to a liquid, it releases heat. Econ Syst Res 29(3):452461, Ouattara B, Strobl E (2013) The fiscal implications of hurricane strikes in the Caribbean. Cyclone Nivar and its Impact | Civils360 IAS The individual point estimates are shown in Figs. Technical report, Universit catholique de Louvain (UCL). This exogenous measure allows me to identify an immediate negative growth effect of tropical cyclones for two out of seven sectoral aggregates including agriculture, hunting, forestry, and fishing and wholesale, retail trade, restaurants, and hotels. 2019), Felbermayr and Grschl (2014) show that storms from the previous fiveyears can also have a negative growth effect. Ann Rev Resour Econ 8(1):4375, Hsiang SM, Jina AS (2014) The causal effect of environmental catastrophe on long-run economic growth: evidence from 6,700 cyclones. Evidence from India. A damage function that takes into account only the exposed population would underestimate the damage caused to the agricultural sector, given the large unpopulated but agriculturally used areas in the north and west of Australia.

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