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The Long-Term Consequences of Disasters: What Do We Know, and What We Still Don't

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  • Noy, Ilan
  • duPont IV, William
Abstract
What are the long-term economic consequences of disasters? This question is debated among scholars, but any answer for it is very important for policymakers as well. Several factors should be taken into consideration when assessing likely post-disaster long-term outcomes, including the type and severity of the event, the underlying composition of the economy, and the total area impacted. Additionally, the way that researchers choose to define long-term impact, and what is being measured, also matters. Regardless, there is no clear consensus concerning the long-term economic consequences of these events. A common way to identify this impact is to compare the economy post-disaster to the level it was at prior to the event. This approach can be useful when estimating the impact in the short term; however, when analyzing the long-term impact this approach is less convincing. Economies are constantly changing, and over long periods of time these changes will accumulate. Therefore, one of the biggest challenges these inquiries face is the need to estimate what the level of economic activity would have been had the disaster not occurred. The methodologies in which researchers go about doing this can have a significant impact on their conclusions, as we show with several examples. We also describe studies that use data collected at regional or city/township level; these have found a much more nuanced set of results.

Suggested Citation

  • Noy, Ilan & duPont IV, William, 2018. "The Long-Term Consequences of Disasters: What Do We Know, and What We Still Don't," International Review of Environmental and Resource Economics, now publishers, vol. 12(4), pages 325-354, December.
    • Handle: RePEc:now:jirere:101.00000104
    DOI: 10.1561/101.00000104
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    Citations

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    Cited by:

    1. David J. Frame & Michael F. Wehner & Ilan Noy & Suzanne M. Rosier, 2020. "The economic costs of Hurricane Harvey attributable to climate change," Climatic Change, Springer, vol. 160(2), pages 271-281, May.
    2. Roman Horvath, 2020. "Natural Catastrophes and Financial Development: An Empirical Analysis," Working Papers IES 2020/14, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2020.
    3. Kevin T. Smiley & Ilan Noy & Michael F. Wehner & Dave Frame & Christopher C. Sampson & Oliver E. J. Wing, 2022. "Social inequalities in climate change-attributed impacts of Hurricane Harvey," Nature Communications, Nature, vol. 13(1), pages 1-10, December.
    4. Huang, Lulu & Liu, Qiannan & Tang, Yugang, 2024. "Long-term economic impact of disasters: Evidence from multiple earthquakes in China," World Development, Elsevier, vol. 174(C).
    5. Mohammad Reza Farzanegan & Sven Fischer, 2023. "The Impact of a Large-Scale Natural Disaster on Local Economic Activity: Evidence from the 2003 Bam Earthquake in Iran," CESifo Working Paper Series 10502, CESifo.
    6. Matteo Coronese & Davide Luzzati, 2022. "Economic impacts of natural hazards and complexity science: a critical review," LEM Papers Series 2022/13, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    7. Miranda,Juan Jose & Butron,Luigi & Pantoja,Chrissie & Gunasekera,Rashmin, 2021. "Mangroves as Coastal Protection for Local Economic Activities from Hurricanes in the Caribbean," Policy Research Working Paper Series 9863, The World Bank.
    8. Preeya Mohan & Toshihiro Okubo & Eric Strobl, 2020. "Natural Disasters and Industrial Production Efficiency: Evidence from Prewar Japan," Keio-IES Discussion Paper Series 2020-006, Institute for Economics Studies, Keio University.
    9. Horvath, Roman, 2021. "Natural catastrophes and financial depth: An empirical analysis," Journal of Financial Stability, Elsevier, vol. 53(C).
    10. Rio Yonson & Ilan Noy, 2020. "Disaster Risk Management Policies and the Measurement of Resilience for Philippine Regions," Risk Analysis, John Wiley & Sons, vol. 40(2), pages 254-275, February.
    11. Tetsuji Okazaki & Toshihiro Okubo & Eric Strobl, 2020. "The Bright and Dark Side of Financial Support from Local and Central Banks after a Natural Disaster: Evidence from the Great Kanto Earthquake, 1923 Japan," Keio-IES Discussion Paper Series 2020-001, Institute for Economics Studies, Keio University.
    12. Ilan Noy & Eric Strobl, 2023. "Creatively Destructive Hurricanes: Do Disasters Spark Innovation?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(1), pages 1-17, January.
    13. Mensah, Edouard R. & Filipski, Mateusz J., 2022. "Saving for a rainy day: the impact of natural disasters on savings rates," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322266, Agricultural and Applied Economics Association.
    14. Alves, Pedro Jorge & Lima, Ricardo Carvalho de Andrade & Emanuel, Lucas, 2022. "Natural disasters and establishment performance: Evidence from the 2011 Rio de Janeiro Landslides," Regional Science and Urban Economics, Elsevier, vol. 95(C).
    15. Stéphane Hallegatte & Adrien Vogt-Schilb & Julie Rozenberg & Mook Bangalore & Chloé Beaudet, 2020. "From Poverty to Disaster and Back: a Review of the Literature," Economics of Disasters and Climate Change, Springer, vol. 4(1), pages 223-247, April.
    16. Berlemann, Michael & Eurich, Marina, 2021. "Natural hazard risk and life satisfaction – Empirical evidence for hurricanes," Ecological Economics, Elsevier, vol. 190(C).
    17. Toshihiro Okubo & Eric Strobl, 2021. "Natural disasters, firm survival, and growth: Evidence from the Ise Bay Typhoon, Japan," Journal of Regional Science, Wiley Blackwell, vol. 61(5), pages 944-970, November.
    18. Yonson, Rio & Noy, Ilan & Ivory, Vivienne C. & Bowie, Chris, 2020. "Earthquake-induced transportation disruption and economic performance: The experience of Christchurch, New Zealand," Journal of Transport Geography, Elsevier, vol. 88(C).
    19. Matteo Coronese & Federico Crippa & Francesco Lamperti & Francesca Chiaromonte & Andrea Roventini, 2023. "Raided by the storm: how three decades of thunderstorms shaped U.S. incomes and wages," LEM Papers Series 2023/40, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    20. Eduardo Cavallo & Bridget Hoffmann & Ilan Noy, 2023. "Disasters and Climate Change in Latin America and the Caribbean: An Introduction to the Special Issue," Economics of Disasters and Climate Change, Springer, vol. 7(2), pages 135-145, July.
    21. Fekete, Alexander & Fuchs, Sven & Garschagen, Matthias & Hutter, Gérard & Klepp, Silja & Lüder, Catharina & Neise, Thomas & Sett, Dominic & von Elverfeldt, Kirsten & Wannewitz, Mia, 2022. "Adjustment or transformation? Disaster risk intervention examples from Austria, Indonesia, Kiribati and South Africa," Land Use Policy, Elsevier, vol. 120(C).
    22. David J. Frame & Suzanne M. Rosier & Ilan Noy & Luke J. Harrington & Trevor Carey-Smith & Sarah N. Sparrow & Dáithí A. Stone & Samuel M. Dean, 2020. "Climate change attribution and the economic costs of extreme weather events: a study on damages from extreme rainfall and drought," Climatic Change, Springer, vol. 162(2), pages 781-797, September.
    23. Lulu Huang & Qiannan Liu, 2024. "The Impact of Natural Disasters on Corporate ESG Performance: Evidence from China," Sustainability, MDPI, vol. 16(12), pages 1-14, June.
    24. Timothy Wilson & Ilan Noy, 2023. "Fifty years of peril: A comprehensive comparison of the impact of terrorism and disasters linked to natural hazards (1970–2019)," Global Policy, London School of Economics and Political Science, vol. 14(5), pages 647-662, November.
    25. Cuong Nguyen & Ilan Noy & Dag Einar Sommervoll & Fang Yao, 2023. "Settling insurance claims with cash or repair and housing market recovery after an earthquake," Economics of Disasters and Climate Change, Springer, vol. 7(1), pages 117-134, March.

    More about this item

    Keywords

    Economic impact; long-run; long-term growth; recovery; socio-economic; disaster;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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