The number in parentheses compares the coefficients to the sample average of the respective InputOutput coefficient (in %). The underlying calculations for these numbers are as follows: agricultural damage: 91/1027 = 0.0886, population damage: 82/1035 = 0.0801. Eastern North Carolina is prone to flooding associated with tropical cyclones (e.g., hurricanes Fran in 1996 and Matthew in 2016) and it is likely that an event similar to the Hurricane Florence . To underline the credibility of my regression analyses, I test the sensitivity of my results in various ways. As per the guidelines of the World . How did the tropical cyclone impact the people communities? Other studies identify negative effects that are only significant in the short run but are insignificant in the long run (Strobl 2012; Bertinelli and Strobl 2013; Elliott etal. One major effort of this paper is to generate a new meaningful sectoral damage variable on a country-year level. The results of the InputOutput analysis, summarized in Appendix A.6.2, are a little less robust. World Bank Policy Research Working Paper 5507. http://hdl.handle.net/10986/3991, Heinen A, Khadan J, Strobl E (2018) The price impact of extreme weather in developing countries. Anthropogenic influences on major tropical cyclone events By doing so, I test the null-hypothesis of no effect of the damage variable. Possible reasons for these indirect effects, could be changes in fishing patterns in response to tropical cyclones (Bacheler etal. In total, I exclude five country-year observations from my analysis: Dominican Republic 1979, Grenada 2004, Montserrat 1989, Myanmar 1977, and Saint Lucia 1980. 2019). Finally, I test two sub-samples, one with all potential outliers and one where I include only the countries exposed to tropical cyclones.Footnote 32. To allow for the possibility of multiple tropical cyclones per year and country, I conduct two 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. Nearly 2 million people have died globally due to tropical cyclones. Tropical cyclones only lead to a small number of production process changes with coefficients being relatively small. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. However, these growth rates are simply not high enough to reach the pre-disaster growth path. 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. These empirical studies all share that they use firm-level data to draw conclusions on upstream and downstream production disruptions. J Infrastruct Syst 7(1):112, Hallegatte S, Przyluski V (2010) The economics of natural disasters: concepts and methods. For the sample average (0.88) of the regression of Column (1), this effect can be translated into a decrease of \(-298\)%, as displayed in Fig. Since the tropical cyclone data has global coverage since 1950, I am able to introduce lags of up to 20years without losing observations of my dependent variable, which ranges from 1971 to 2015. J Dev Econ 111:92106, Fetzer T (2020) Can workfare programs moderate conflict? The tests are conducted with the STATA command parmest (Newson 1998). The outcomes of this study can serve as a guide for local governments and international organizations to revise and refine their adaptation and mitigation strategies. Future weather. How Tropical Cyclone Eloise Impacted the Environment 2018) or exposed area (Hsiang and Jina 2014) to weight the respective physical intensities of tropical cyclones. 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. 2013). These results are line with previous empirical studies. 7. Since the commonly used report-based EM-DAT data set (Lazzaroni and van Bergeijk 2014) has been criticized for measurement errors (Kousky 2014), endogeneity, and reverse causality problems (Felbermayr and Grschl 2014), I use meteorological data on wind speeds to generate a proxy for the destructive power of tropical cyclones.Footnote 3 This approach is in line with previous empirical studies (e.g., Hsiang 2010; Strobl 2011, 2012), but I advance this literature by generating a sector-specific damage function. Additionally, this finding undermines the urgency to analyze past influences beyond one or two years when examining the economic impacts of natural disasters. These surges, sometimes called tidal waves, can drown people and animals, and are often the greatest killers in a cyclone. \end{array}\right. } Florence was labeled a post-tropical cyclone at 5 a.m. on Tuesday, Sept. 18, according to the National Hurricane Center. The main explanatory variable is a new damage measure for local tropical cyclone intensity based on meteorological data weighted for individual sectoral exposure, which is included in a panel analysis for a maximum of 205 countries over the 19702015 period. Freddy has finally been declared over by the French Meteorological service. The remainder of this paper is structured as follows: Sect. Freddy: The deadly cyclone that lasted more than a month What will Hurricane Florence impact be on the economy? In order to design effective mitigation and adaptation disaster policies to this threat, it is important to understand the economic impact of natural disasters. The analysis is conducted on a country-year level. It is not empirically clear how long past tropical cyclones influence present economic growth rates. Figure2 demonstrates why it is important to differentiate between exposed agriculture and population. They can best be summarized by three possible hypotheses: recovery to trend, build-back-better, and no recovery (Chhibber and Laajaj 2008). 2. The South Pacific has recently been hit by particularly destructive cyclones like Winston and Pam. Bull Am Meteorol Soc 101(3):E303E322, Korty R (2013) Hurricane (typhoon, cyclone). Excellent proofreading was provided by Jamie Parsons and Harrison Bardwell. The variables are measured in constant 2005 USD. J Afr Econ 17(Supplement2):ii7ii49, Cole MA, Elliott RJR, Okubo T, Strobl E (2019) Natural disasters and spatial heterogeneity in damages: the birth, life and death of manufacturing plants. As investors kept their eyes on the weather and its potential for destruction, estimates emerged of up to $27 billion in hurricane damage. 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. Moreover, extreme damaging tropical cyclones are relatively rare. https://doi.org/10.1007/s10640-021-00541-5, DOI: https://doi.org/10.1007/s10640-021-00541-5. Appendix A.6 exhibits the resulting robustness tests for the direct and indirect sectoral effects.Footnote 33 For the direct sectoral effects, the significant results remain robust in all different specifications underlining their credibility for the empirical model used.Footnote 34 While the placebo test yields no significant coefficients, the coefficients and p-value remain relatively stable in all remaining robustness tests, as summarized in Fig.