\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 . Additionally, it is unexplained how the sectors are interconnected and if their structural dependence changes. To allow for the possibility of multiple tropical cyclones per year and country, I conduct two robustness tests. Table 21 in Appendix A.5 reveals that even with the smaller sample, all previously found effects can be identified again. During 6 February, the Australian Bureau of Meteorology (BoM) reported that the tropical low had developed into a Category 1-cyclone on the Australian scale . The gray shaded area specifies the respective 95% confidence bands, and the red line depicts the connected estimates. As investors kept their eyes on the weather and its potential for destruction, estimates emerged of up to $27 billion in hurricane damage. Stagnant water can cause the spread of disease, and transportation or communication infrastructure may have been destroyed, hampering clean-up and rescue efforts. Evidence from India. (2012) find no significant for the service sector.Footnote 21 Likely reason for this downturn could be less (domestic and international) touristic income for the restaurant and hotel sectors (Hsiang 2010; Lenzen etal. J Dev Econ 88(2):221231, Onuma H, Shin KJ, Managi S (2020) Short-, medium-, and long-term growth impacts of catastrophic and non-catastrophic natural disasters. Hsiang (2010) also finds a negative effect of hurricanes for this sectoral aggregate for the Caribbean countries, whereas Loayza etal. The different economic activities are classified as follows with the respective ISIC codes given in parentheses: agriculture, hunting, forestry, and fishing (A&B); mining, and utilities (C&E); manufacturing (D); construction (F); wholesale, retail trade, restaurants, and hotels (GH); transport, storage, and communication (I); other activities (JP), which include, inter alia, the financial and government sector. A tropical cyclone is a low pressure system that develops over tropical waters, characterized by high winds and heavy rain. Econ Inquiry 46(2):214226, de Mel S, McKenzie D, Woodruff C (2012) Enterprise recovery following natural disasters. Part of Springer Nature. It remains unclear if there exists some key sector, which, if damaged, results in a negative shock for the other sectors. Tropical cyclones are large, cyclonically rotating wind systems that form over tropical or sub-tropical oceans and are mostly concentrated on months in summer or early autumn in both hemispheres (Korty 2013). A strong pressure gradient rapidly developed within the system as it headed west resulting in a category rating of 5 by 8 March. Details of How did the tropical cyclone eloise impact the environment? The main causal identification stems from the occurrence of tropical cyclones, which are unpredictable in time and location (NHC 2016) and vary randomly within geographic regions (Dell etal. To quantify the destructiveness of tropical cyclones, I construct a new damage measure based on meteorological data weighted by different exposure of the sectors. Q J Econ 131(3):15431592, Berlemann M, Wenzel D (2018) Hurricanes, economic growth and transmission channels: empirical evidence for countries on differing levels of development. 2019) or the destruction of vessels. 25111299), Oosterhaven J (2017) On the limited usability of the inoperability IO model. Sci Rep 9(1):20452322. \(Damage_{i,t}\) is the derived damage function for country i at year t from Eq. For the Placebo test I have to forward the damage variable by two periods, since the damage in t index consists of the affected agricultural land/exposed population in \({t-1}\). Stagnant water can cause the spread of disease, and transportation or communication infrastructure may have been destroyed, hampering clean-up and rescue efforts. 2015). As tropical cyclones are exogenous to sectoral economic growth, the greatest threat to causal identification could arise by omitting important climatic variables that are correlated with tropical cyclones (Auffhammer etal. Ten mass-feeding kitchens were set up. Furthermore, one could also argue that the estimation results are biased by the fact that certain regions have a higher exposure to tropical cyclones than others. 1.Environment . Therefore, I propose a new damage measure that explicitly considers these different exposures. Likewise, the contemporaneous, non-significant effect for the remaining sectors can be explained as a result of lower vulnerability and/or efficient recovery measures, which attenuate the potentially negative effect of tropical cyclones. Cyclones can produce flooding in two ways. The sectoral GDP data originates from the United Nations Statistical Division (UNSD) (United Nations Statistical Division 2015b). Finally, the standard errors \(\epsilon _{i,t}\) could be biased by the autocorrelation of unobservable omitted variables (Hsiang 2016). The sixth named storm, third hurricane, and the first major hurricane of the 2018 Atlantic hurricane season, Florence originated from a strong tropical wave that emerged off the west coast . 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. Originally a low-pressure system north of the Gulf of Carpentaria, Ingrid moved eastward and developed into a tropical cyclone in the Coral Sea on 6 March 2005. Florence was labeled a post-tropical cyclone at 5 a.m. on Tuesday, Sept. 18, according to the National Hurricane Center. 6. 2010). 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. Rev Environ Econ Policy 7(2):181198, Aznar-Siguan G, Bresch DN (2019) CLIMADA v1: a global weather and climate risk assessment platform. 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. It is evident from this analysis that many potential production changes are canceled out because of counteracting indirect effects. Economic sectors most vulnerable to direct capital destruction of tropical cyclones must be identified. 2014). \end{array}\right. } Evidence from developing countries. Together with further control variables, Table 2 in Appendix A.4 lists the exact definition of all variables used. It asks for less input from the wholesale, retail trade, restaurants, hotels and mining and utilities sector aggregates, which results from a supply shock in the agricultural sector. For the agricultural sector, I use the fraction of exposed agricultural land, while for the remaining sectors, I use the gridded population. 2019), and the sector other activities (JP) comprises, among others, the financial sector. Stata J 17(3):630651, Holland GJ (1980) An analytic model of the wind and pressure profiles in hurricanes. For sectoral GDP effects, however, no such evidence exists so far. 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. Additionally, the lagged dependent variable controls for a sluggish adjustment to shocks of the individual sector input composition. 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. Gross value added is defined by the UNSD as the value of output less the value of intermediate consumption (United Nations Statistical Division 2015a). As the manufacturing sectors are responsible for much of the counterbalancing of indirect effects, they should not be forgotten by the policymakers, even though they show no direct negative effects. In comparison, in my analysis, I take meteorological data as input which is exogenous to the political and economic situation, contains all existing tropical cyclones, and has no quality fluctuations. eSwatini also experienced rainfall.. Fourth, to alleviate concerns of biased uncertainty measures (Hsiang 2016), I calculate different standard errors: NeweyWest standard errors with a lag length of 10 years and Conley-HAC standard errors, allowing for a spatial and temporal dependence within a radius of 1000km and within a time span of 10 years. Ecol Econ 85:105115, Schreck CJ, Knapp KR, Kossin JP (2014) The impact of best track discrepancies on global tropical cyclone climatologies using IBTrACS. 2019), Felbermayr and Grschl (2014) show that storms from the previous fiveyears can also have a negative growth effect. Springer, New York, London, Toya H, Skidmore M (2007) Economic development and the impacts of natural disasters. Furthermore, only a minority of studies explicitly investigate the disasters influences on sectoral economic development. The individual colors represent different wind speed intensities. Nearly 2 million people have died globally due to tropical cyclones. However, little is known about the empirical InputOutput effects across broader sectors after a natural disaster shock. The storm was named by the Australian Bureau of Meteorology on 4 February and and finally came to an end on 14 March. Geosci Model Dev 12(7):30853097, Bacheler NN, Shertzer KW, Cheshire RT, MacMahan JH (2019) Tropical storms influence the movement behavior of a demersal oceanic fish species. In a similar manner, Mohan and Strobl (2017) find evidence that a positive growth effect of the construction sector, financed by international aid or government programs, lead to a fast recovery of South-Pacific Islands after tropical cyclones.Footnote 27, Significant effects of tropical cyclone damage on disaggregated InputOutput coefficients. 2.Economy 3.People /communities 0.1\(^{\circ }\) corresponds to approximately 10km at the equator. 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. 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. The gray areas represent the respective 95% confidence intervals and the red line indicates the respective (connected) cumulative point estimates. 2014). There are two important points to note about this tropical cyclone damage variable. This corresponds to a mean annual global loss of USD 16.7 billion (measured in constant 2005 USD) for the sample average. Moreover, I include time fixed effects \(\delta _t\) to account for time trends and other events common to all countries in the sample.