how did the tropical cyclone impact the economy of florence

The InputOutput analysis demonstrates that production processes are only slightly disturbed by tropical cyclones. About how did tropical cyclone eloise impact the economy. Springer, New York, London, Toya H, Skidmore M (2007) Economic development and the impacts of natural disasters. To underline the credibility of my regression analyses, I test the sensitivity of my results in various ways. One reason could be that the destruction of productive capital outweighs the higher number of orders. How did the tropical cyclone impact the communities of Florence? | how I decide to only examine changes in the InputOutput coefficients and not at indirect costs because it almost needs no assumptions. The manufacturing sectors use significantly less input from itself, which is not shown in Fig. Int J Disaster Risk Sci 10(2):166178, Munich R (2018) NatCatSERVICERelevant natural loss events worldwide 19802018. Natural Hazard-Induced Disasters and Production Efficiency: Moving Closer to or Further from the Frontier? Nevertheless, it unveils the importance of the manufacturing sectors, as already demonstrated by their strong intersectoral connection in Fig. 2014). It . Environ Resource Econ 78, 545569 (2021). Moody's estimates that the property loss and direct damages from Hurricane Florence will total $17-22 billion, making it one of the top 10 costliest natural disasters in US history. 2019). It remains unclear if there exists some key sector, which, if damaged, results in a negative shock for the other sectors. Tropical Cyclones | World Meteorological Organization To allow for the possibility of multiple tropical cyclones per year and country, I conduct two robustness tests. This does not mean that there have to exist a permanent negative growth effect for every period after the disaster. Circle diameters represent the average proportional share on total GDP ranging from 32% (other activities), over 12% (manufacturing) to 6% (construction).Footnote 25. World Dev 21(9):14171434, Angrist JD, Pischke J-S (2009) Mostly harmless econometrics: an empiricists companion. www.emdat.be, Haimes YY, Jiang P (2001) Leontief-based model of risk in complex interconnected infrastructures. Meteorological history of Hurricane Florence - Wikipedia It comprises the logged per capita value added of the respective sector j to simulate a dynamic panel model, the population growth rate, a variable for openness (i.e., imports plus exports divided by GDP), and the growth rate of gross capital formation.Footnote 18 Including these socioeconomic control variables introduce some threats to causal inference. Storms that are strongest originate off the west coast of Africa because they have two weeks worth of warm water to build up over. The country fixed effects \(\theta _i\) control for unobservable time-invariant country-specific effects, such as culture, institutional background, and geographic location. PubMedGoogle Scholar. 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. https://unstats.un.org/unsd/snaama/Metadata/Glossary#, United Nations Statistical Division (2015b) Methodology for the national accounts main aggregates database. PDF Tropical Cyclones: Impacts, the link to Climate Change and Adaptation Appendix Table 43 and 54 show that the results remain qualitatively unchanged. Flooding could prove devastating. J Environ Econ Manag 98:102252, Elsner JB, Kossin JP, Jagger TH (2008) The increasing intensity of the strongest tropical cyclones. At the same time, other sectors demand more from the manufacturing sectors, resulting in a zero aggregate negative effect for them. 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. However, the country fixed effects partly control for this concern. 2019). As demonstrated in Fig. In addition, in a recent working paper, Hsiang and Jina (2014) even demonstrate a long-term negative impact of tropical cyclones of up to 20 years. Given these positive demand effects, one may ask why a significant contemporaneous positive direct effect for the construction sector cannot be seen. 00:00 00:00 An unknown error has occurred PDF 4.5: Economic Impacts of Tropical Cyclones - University of Colorado Boulder Appendix A.5 presents further statistics: Figs. How did the tropical cyclone Eloise impact the economy and people. Note that InputOutput coefficients can only range between 0 and 1. 2018; Elliott etal. 1.Environment . To be in line with the related growth literature, I estimate a further specification where I add a set of socioeconomic control variables (Islam 1995; Strobl 2012; Felbermayr and Grschl 2014). Econ Inquiry 46(2):214226, de Mel S, McKenzie D, Woodruff C (2012) Enterprise recovery following natural disasters. How did the Tropical Cyclone Florence impact the people communities? Environmental impacts of Hurricane Florence flooding in eastern North This is because there are regions showing increases or . The sectoral GDP data originates from the United Nations Statistical Division (UNSD) (United Nations Statistical Division 2015b). The sample period hence reduces to 19712015. Appendix A.6 first shows the results of the randomization tests, followed by coefficient plots that summarize the remaining specifications. However, it has been demonstrated that this bias can be neglected if the panel is longer than 15 time periods (Dell etal. The gray areas represent the respective 95% confidence intervals and the red line indicates the respective (connected) cumulative point estimates. I take advantage of the International Best Track Archive for Climate Stewardship (IBTrACS) provided by the National Oceanic and Atmospheric Administration (Knapp etal. Additionally, the GTAP database is not freely available and only covers a few years. Last week, the East Coast prepared for Hurricane Florence, which roared through the Carolinas and Georgia. Tropical Cyclone Freddy on track to become record-breaking storm Section4 presents the main results as well as robustness checks. Google Scholar, Kousky C (2014) Informing climate adaptation: a review of the economic costs of natural disasters. 2019), Felbermayr and Grschl (2014) show that storms from the previous fiveyears can also have a negative growth effect. 2023 Springer Nature Switzerland AG. The other proportional shares on total GDP are: Wholesale, retail trade, restaurants, hotels (15%); agriculture, hunting, forestry, fishing (14%); mining and utilities (10%); transport, storage, communication (8%). J Appl Meteorol Climatol 52(8):16881697, Blanc E, Strobl E (2016) Assessing the impact of typhoons on rice production in the Philippines. Social, Environmental and Economic impacts - Tropical Cyclones - Weebly Evidence from developing countries. The start of the arrow shows the input, and the end denotes the respective output. In general, a one standard deviation increase in tropical cyclone damage is associated with a decrease in the annual growth rate in the sector aggregate agriculture, hunting, forestry, and fishing of \(-\,2.62\) percentage points. J Dev Econ 97(1):130141, Terry JP (2007) Tropical cyclones: climatology and impacts in the South Pacific. Tropical cyclones use warm, moist air as their source of energy or "fuel". A study led by Kevin Reed, PhD, Assistant Professor in the School of Marine and Atmospheric Sciences (SoMAS) at Stony Brook University, and published in Science Advances, found that Hurricane. Climate change impacted Hurricane Florence's precipitation and size In addition to damaging wind speed, salty sea spread and storm surge can cause salinization of the soil, leaving it useless for cultivation. J Appl Meteorol Climatol 55(4):9931007, Boehm CE, Flaaen A, Pandalai-Nayar N (2019) Input linkages and the transmission of shocks: firm-level evidence from the 2011 Tohoku earthquake. Their destructiveness has three sources: damaging winds, storm surges, and heavy rainfalls. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/. The coefficients show the increase of the respective damage variable by one standard deviation. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. Direct impacts on commercial property and infrastructure can lead to production shortfalls. The remainder of this paper is structured as follows: Sect. This behavior most likely speaks for an enduring risk adjustment of tourists. NBER Working Paper 20352. http://www.nber.org/papers/w20352.pdf, Islam N (1995) Growth empirics: a panel data approach. As Sect. Based on physical intensity data, Hsiang (2010) analyzes the effect of hurricanes on seven sectoral aggregates in a regional study for 26 Caribbean countries. Sectoral GDP is defined as gross value added per sector aggregate and is collected for different economic activities following the International Standard Industrial Classification (ISIC) revision number 3.1. The meteorological history of Hurricane Florence spanned 22 days from its inception on August 28, 2018, to its dissipation on September 18. J Econ Geogra 20(3):857877, NHC (2016) National hurricane center forecast verification. First, as shown by Nickell (1981), there is a systematic bias of panel regressions with a lagged dependent variable and fixed effects. 0.1\(^{\circ }\) corresponds to approximately 10km at the equator. This study provides an explanation about which sectors contribute to an overall negative GDP-effect of tropical cyclones identified by previous studies (Noy 2009; Strobl 2012; Elliott etal. Tropical storm case study - Hurricane Ida - Tropical cyclones - Edexcel Google Scholar, Auffhammer M, Hsiang SM, Schlenker W, Sobel A (2013) Using weather data and climate model output in economic analyses of climate change. Figure 8 also offers an explanation for the downturn of the mining and utilities (C&E) sector aggregate after some years, as shown in Fig. Anthropogenic influences on major tropical cyclone events J Econ Geogr 19(2):373408, Cuaresma JC, Hlouskova J, Obersteiner M (2008) Natural disasters as creative destruction? Some areas experience record rainfall with widespread flooding and predictions for it to get worse. 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. Figure 8 reveals some patterns that are not visible on the aggregate level. Previous empirical studies on the relationship between economic development and tropical cyclone damage found a negative influence on GDP growth (e.g., Strobl 2011; Bertinelli and Strobl 2013; Grger and Zylberberg 2016). 6, these positive demand shocks lead to a positive growth impulse in the construction sector. World Dev 105:231247, Bertinelli L, Strobl E (2013) Quantifying the local economic growth impact of hurricane strikes: an analysis from outer space for the Caribbean. Additionally, within the agriculture, hunting, forestry, and fishing sectors, only the fishing sector experiences indirect negative effects. 2013). For example, Hsiang (2010) finds an immediate positive response of the construction sector. My results indicate that this negative aggregate effect can be attributed to two sectoral aggregates, including agriculture, hunting, forestry, and fishing; manufacturing and wholesale, retail trade, restaurants, and hotels. Read the InFocus blog post on climate change and flooding Sven Kunze. The data are collected every year for as many countries and regions as possible.Footnote 11 The sample used in my analysis covers the 19702015 period and includes a maximum of 205 countries.Footnote 12, To analyze potential sectoral shifts within the economy after a tropical cyclone, I take advantage of the InputOutput data of EORA26 (Lenzen etal. This heat is the energy that is released or absorbed during a phase change in water. The storm will likely damage homes. Additionally, Cole etal. Therefore, in this section, I investigate, by means of the InputOutput analysis, how the sectors change their interaction after a tropical cyclone has hit a country. Resembling large whirlpools, they are made up of rotating, moist air, with wind speeds that can reach over 120 km/h. These results are line with previous empirical studies. The increase in tropical cyclone losses has led to concern that anthropogenic climate change is contributing to this trend. But those that do occur will be more intense and damaging. Ecol Econ 85:105115, Schreck CJ, Knapp KR, Kossin JP (2014) The impact of best track discrepancies on global tropical cyclone climatologies using IBTrACS. On the other hand, EORA26 works continuously on quality check reports and compares its result to other InputOutput databases such as GTAP or WIOD.Footnote 13. Q J Econ 110(4):11271170, Klein Goldewijk K, Beusen A, Doelman J, Stehfest E (2017) Anthropogenic land use estimates for the holoceneHYDE 3.2. 2012), insurance payments (Nguyen and Noy 2019), or government spending (Ouattara and Strobl 2013), which help the economy reach its pre-disaster income level. How did Florence impact the economy? | how did tropical cyclone The recovery to trend hypothesis characterizes a pattern where after a negative effect in the short run, the economy recovers to the previous growth path after some time. The dynamic analysis reveals that past tropical cyclones have a negative influence on the majority of sectors providing evidence for the no recovery hypothesis discussed in the literature. However, these growth rates are simply not high enough to reach the pre-disaster growth path. Color intensities indicate p values according to: \(p<0.01\), \(p<0.05\), \(p<0.1\). However, to control for possible rainfall damage, I conduct a robustness test which includes a variable for precipitation (see Appendix Table 24 and and Figs. Freddy: The deadly cyclone that lasted more than a month In particular, I calculated the leverage and dfbeta of the damage coefficient. 2013), I control for the mean temperature and precipitation of a country in further specifications. To analyze potential indirect effects which could emerge because of changes in the InputOutput composition of the individual sectors, I test the following set of equations for the different Input(j)Output(k) combinations: where \(IO_{i,t}^{j,k}\) indicates the InputOutput coefficient of sectors j and k in year t and country i. 7. 25111299), Oosterhaven J (2017) On the limited usability of the inoperability IO model. The variables are measured in constant 2005 USD. Anatomy of monster storm: how Cyclone Ilsa is shaping up to devastate World Dev 40(7):13171336, Mendelsohn R, Emanuel K, Chonabayashi S, Bakkensen L (2012) The impact of climate change on global tropical cyclone damage. The weighted tropical cyclone damage variables are orthogonal to economic growth as well as the InputOutput coefficients, and the panel approach allows me to identify the causal effect. They show that there are nearly no lagged responses present. The procedure is hierarchical and reaches from other official governmental publications over publications from other international organizations to the usage of data from commercial providers (United Nations Statistical Division 2015b). 2020). 6: The manufacturing sectors ask significantly less input from it. 4 displays the average InputOutput coefficients for all countries for all available years (19902015). While the distribution reveals that on average, geographically smaller countries, such as Hong Kong, Dominica or Jamaica, have a higher damage, there exists a difference between both damage measures, even for the highly exposed countries. Observations were excluded if they were above the \((2k+2)/n\) threshold for leverage and above the 2/sqrt(n) threshold for dfbeta. Tropical Cyclone Cheneso was a strong tropical cyclone that affected Madagascar in January 2023. (Color figure online). WMO continues to monitor the "remarkable" tropical storm, which has cut a destructive path across . For example, Loayza etal. The storm was named by the Australian Bureau of Meteorology on 4 February and and finally came to an end on 14 March. Cyclone Nivar and its Impact | Civils360 IAS They are responsible for a demand shock in the mining and quarrying sectoral aggregate, leading to delayed negative growth effects being persistent over 10years. From 1980 to 2018 tropical cyclones were responsible for nearly half of all natural disaster losses worldwide, with damage amounting to an aggregate of USD 2111 billion (Munich Re 2018). An exception forms the mean damage robustness test for the wholesale, retail trade, restaurants, and hotels sectors, where the coefficient turns slightly insignificant (\(p=0.12\)). Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. For both variables, I use the year-by-year variation calculated from the Climatic Research Unit (CRU) version 4.01, which is available at a resolution of approximately 50km since 1901 (University of East Anglia Climatic Research Unit et al. It is based on a physical wind model and thereby overcomes criticism of report-based damage data. Figure 6 illustrates the cumulative point estimates of the past influence of tropical cyclone damage on the different sectoral growth variables.Footnote 22 The x-axis represents the lags of the damage variable, while the y-axis indicates the size of the cumulative coefficient \(\beta\) (in standard deviations). Therefore, I include the mean level of temperature and precipitation as additional climate controls in a further specification. Stagnant water can cause the spread of disease, and transportation or communication infrastructure may have been destroyed, hampering clean-up and rescue efforts. (2012) use data from EM-DAT as main input for their explanatory variables. 2632). Additionally, I allow for country-specific linear trends \(\mu _i*t\). Given that producers in modern economies are . Since the sample period is reduced to 19902015 due to data availability, I re-estimated the regression model of the main specification 2 for the reduced sample of model 6. Once it makes landfill, Florence is expected to lash coastal communities with 130-mph winds and to dump several feet of water. Hurricane Florence's Economic Damage on Carolinas, Virginia, and US 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. Based on the InputOutput analysis, there are only a small number of significant sectoral shifts. Additionally, it seems that the fishing sector is responsible for the negative supply shock in the agriculture, hunting, forestry, and fishing sector aggregate. Technical report, Centre for Environmental Data Analysis (CEDA), World Bank (2010) Natural hazards, unnatural disasters: the economics of effective prevention: overview. (Color figure online). Effects of tropical cyclone damage on sectoral GDP growth compared to sample average. NHESS - Economic damage and spillovers from a tropical cyclone The storm currently has a maximum sustained wind speed of 25 mph and is located 105 miles west-northwest of New York City at the time of publication, as reported by CBS News.

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