1,721,156 research outputs found
Replication Data for: "The Global Costs of Extreme Weather that are Attributable to Climate Change"
No full textData includes the attribution FARs obtained from published research papers and the economic cost data obtained from EMDAT
The unfortunate regressivity of public natural disaster insurance: Quantifying distributional implications of EQC building cover for New Zealand
No full textThis thesis examines the question “What have been the distributional implications of the setup of Earthquake Commission (EQC) building cover for New Zealand homeowners?” In New Zealand, the vast majority of property owners pay identical premiums for the benefit of the first $100,000 tranche of natural disaster cover per dwelling. The research provides a detailed quantification of the degree of regressivity of the scheme created by these flat premiums. Using EQC claims and property datasets relating to the Canterbury Earthquake Series, I test the hypothesis that wealthier homeowners are receiving more benefit. Wealth is identified by property value, income and a range of socio-economic variables collected from the most recent New Zealand Census before the earthquake series. In explaining EQC total dwelling payout by property value and by these socio-economic variables, the research shows there is a distributional implication to EQC’s building cover. This thesis includes a proposed modification to the premium structure of the scheme, whereby regressivity could be avoided. The research concludes with a survey of other public natural disaster insurance schemes worldwide, and identifies those likely to face similar regressivity issues
The role of insurance in business recovery after a natural disaster: The case of the 2011 Christchurch earthquake
No full textWe aim to investigate the role of insurance in business recovery following the devastating Christchurch earthquake in February, 22nd, 2011. We analyze data from two business surveys conducted after the earthquake to examine how insurance affected business operation in the aftermath of the earthquake both in the short-term and longer-term. For the short-term analysis, we use a combination of propensity score matching (PSM) and linear probability model (LPM) to analyze the data. We first estimate the propensity scores for insurance take-up of each firm conditional on the firm’s individual characteristics. Stratification based on the estimated propensity scores is used to match the treated (insured) and the control (uninsured) firms. We then estimate the probability of firms’ continuing operations with a set of control variables to account for the level of damage and disruption caused by the quake in each stratum. We find little evidence of any beneficial effect of insurance coverage on business continuity in the short-run. For the longer-term analysis, we analyze the available survey data using logistic regression. The result suggests that business interruption insurance significantly promotes increased level of long-term productivity for surviving firms following the earthquake
Essays on Disaster Risk and Economic Development
No full textThis thesis consists of four self-contained papers in the areas of disaster risk and economic development. Chapter One provides a qualitative survey of the empirical literature on the nexus among poverty, inequality and natural disasters. The last few years have seen an explosion of economic research on the consequences of natural disasters. This new interest is attributable first and foremost to a growing awareness of the potentially catastrophic nature of these events, but also a result of the increasing awareness that natural disasters are social and economic events. Here, we survey the literature that examines the direct and indirect impact of natural disaster events specifically on the poor and their impact on the distribution of income within affected communities and societies.
With a meta-regression analysis of the existing literature on the impacts of disasters on households in Chapter Two, we observe several general patterns. Incomes are clearly impacted adversely, with the impact observed specifically in per-capita measures. Consumption is also reduced, but to a lesser extent than incomes. Poor households appear to smooth their food consumption by reducing the consumption of non-food items; in particular health and education, and this suggests potentially long-term adverse consequences. Given the limits of our methodology and the paucity of research, we find no consistent patterns in long-term outcomes. We place disaster risk to the poor within the context of sustainable development and future climatic change.
Our objective In Chapter Three is to identify all of the directly observable determinants’ of publicly allocated and realized spending for disaster risk reduction (DRR) at the local government (sub-district) level in Bangladesh. We employ the Heckman two-stage selection model with detailed public finance and other data from 483 sub-districts (Upazilas) across the country. While some of our results conform with our priors, our estimations surprisingly find that government does not respond to the sub-district’s risk exposure as a factor affecting the DRR financing mechanism. This variable is consistently counter-intuitively statistically insignificant. The DRR regional allocations do not seem to be determined by risk and exposure, only weakly by vulnerability, nor even by more transparent political economy motivations.
In Chapter Four, we examine the short-run economic impacts of recurrent flooding on Bangladeshi households surveyed in 2000, 2005 and 2010. In 2010 Household Income and Expenditure Survey (HIES), households answered a set of questions’ on whether they were affected by flood and its likely impacts. We identify two treatment (affected) groups by using the self-reported data and historical rainfall data based flood risk index. We estimate a difference-in-difference (DID) model to quantify the impacts on income, expenditure, asset and labour market outcomes and further extend our analysis to different income and expenditure brackets. Overall, we find robust evidence of negative impacts on agricultural income and expenditure. Intriguingly, the extreme poor (i.e. the bottom 15th quintile) experience significant positive impacts on agricultural income in the self-reported treatment case
Economics of disaster recovery and earthquake insurance: Five essays on New Zealand
No full textThe Canterbury earthquake sequence (2010-2011) was the most devastating catastrophe in New Zealand‘s modern history. Fortunately, in 2011 New Zealand had a high insurance penetration ratio, with more than 95% of residences being insured for these earthquakes. This dissertation sheds light on the functions of disaster insurance schemes and their role in economic recovery post-earthquakes.
The first chapter describes the demand and supply for earthquake insurance and provides insights about different public-private partnership earthquake insurance schemes around the world.
In the second chapter, we concentrate on three public earthquake insurance schemes in California, Japan, and New Zealand. The chapter examines what would have been the outcome had the system of insurance in Christchurch been different in the aftermath of the Canterbury earthquake sequence (CES). We focus on the California Earthquake Authority insurance program, and the Japanese Earthquake Reinsurance scheme. Overall, the aggregate cost of the earthquake to the New Zealand public insurer (the Earthquake Commission) was USD 6.2 billion. If a similar-sized disaster event had occurred in Japan and California, homeowners would have received only around USD 1.6 billion and USD 0.7 billion from the Japanese and Californian schemes, respectively. We further describe the spatial and distributive aspects of these scenarios and discuss some of the policy questions that emerge from this comparison.
The third chapter measures the longer-term effect of the CES on the local economy, using night-time light intensity measured from space, and focus on the role of insurance payments for damaged residential property during the local recovery process. Uniquely for this event, more than 95% of residential housing units were covered by insurance and almost all incurred some damage. However, insurance payments were staggered over 5 years, enabling us to identify their local impact. We find that night-time luminosity can capture the process of recovery; and that insurance payments contributed significantly to the process of local economic recovery after the earthquake. Yet, delayed payments were less affective in assisting recovery and cash settlement of claims were more effective than insurance-managed repairs.
After the Christchurch earthquakes, the government declared about 8000 houses as Red Zoned, prohibiting further developments in these properties, and offering the owners to buy them out. The government provided two options for owners: the first was full payment for both land and dwelling at the 2007 property evaluation, the second was payment for land, and the rest to be paid by the owner‘s insurance. Most people chose the second option. Using data from LINZ combined with data from Stats NZ, the fourth chapter empirically investigates what led people to choose this second option, and how peer effect influenced the homeowners‘ choices.
Due to climate change, public disclosure of coastal hazard information through maps and property reports have been used more frequently by local government. This is expected to raise awareness about disaster risks in local community and help potential property owners to make informed locational decision. However, media outlets and business sector argue that public hazard disclosure will cause a negative effect on property value. Despite this opposition, some district councils in New Zealand have attempted to implement improved disclosure. Kapiti Coast district in the Wellington region serves as a case study for this research. In the fifth chapter, we utilize the residential property sale data and coastal hazard maps from the local district council. This study employs a difference-in-difference hedonic property price approach to examine the effect of hazard disclosure on coastal property values. We also apply spatial hedonic regression methods, controlling for coastal amenities, as our robustness check. Our findings suggest that hazard designation has a statistically and economically insignificant impact on property values. Overall, the risk perception about coastal hazards should be more emphasized in communities
The Economics of Traceability in the New Zealand Dairy Industry
No full textDairy is an important dietary component, particularly for young children. Because of this the dairy industry is especially sensitive to contamination scares. Dairy is of particular importance to the New Zealand economy, com- prising a significant portion of the country’s GDP.
This thesis develops a Markov chain model for the flow of value through the early stages of the dairy supply chain. Using the case of a major New Zealand dairy company, simulations are run under various product testing scenarios. Results point to the importance of where and when testing and interventions take place. Being strict about removing potentially contami- nated product early on in the supply chain can reduce total losses, improving overall production output as a result.
Traceability has become an increasingly important research area in recent years. The initial Markov chain model is extended to incorporate parameters for product tracing. By analysing the results of simulations under various scenarios we are able to estimate the value traceability can contribute in the dairy production chain.
Using an event analysis technique with a multi-factor model, the third part of this thesis examines how share prices, in a major New Zealand dairy com- pany, are impacted by shocks. Product recalls, adverse weather events, and demand shocks are considered. Results suggest that individual event char- acteristics are important, particularly for global demand shocks. Adverse weather events in general are associated with an increase in share price re- turns. A product recall is associated with the greatest drop in share price returns, emphasising the importance of managing recalls well
Infestations as a Natural Disaster: The Economic Impacts of the Fonterra Whey Protein Concentrate Contamination Incident
No full textThis paper presents the results from an investigation into the economic implications for New Zealand of the 2013 Whey Protein Concentrate contamination incident (popularly known as the Fonterra Botulism scare). It assesses the impact of this incident to dairy exports using synthetic control methods. A synthetic counterfactual scenario where the incident did not occur is developed using weighted averages of the dairy exports of countries unaffected by the scare. The research finds that there was an initial negative shock to the exports of products that were thought to have been contaminated, but that there were no significant sustained impacts on other dairy products. The affected products make up only a small proportion of New Zealand dairy exports, with the vast majority of dairy exports being unaffected products. Infant formula exports appear to have recovered somewhat in the long run, however whey product exports remain lower than they otherwise would have been
Assessing the Vulnerability and Resilience of the Philippines to Disasters
No full textSome of the world’s most destructive disasters occurred in the Philippines, and a number of these happened in recent years. In 2011, 2012, and 2013, tropical cyclones Washi, Bopha, and Haiyan, respectively, left a staggering trail of over 8,000 deaths, as well as huge damages to assets and livelihoods. In 2009, tropical cyclones Ketsana and Pharma brought massive riverine floods, with a total damage and loss equivalent to 2.7% of the country’s GDP. This dissertation is an endeavour to measure disaster impacts and welfare risk, and to identify factors affecting vulnerability and resilience in different spatial scales in the Philippines. The first of four chapters is an extensive literature survey on the economic vulnerability and economic resilience to disasters. This serves as a prelude to the succeeding three empirical studies contained in Chapters 3 to 5. Chapter 3 aims to measure tropical cyclone-induced fatalities in the Philippine provinces, and identifies the factors that shape people’s vulnerability. It also quantifies the relative importance of hazard, exposure, and socioeconomic vulnerability in influencing fatalities. Chapter 4 is a household level study that quantitatively establishes the linkages between floods and diseases in the floodplains of a highly-urbanized city in the Philippines (Cagayan de Oro), and provides an estimate on the public finance implications of flood-induced diseases to the Philippine urban areas, and on the additional economic burden on affected households. Chapter 5 measures socioeconomic resilience and welfare risk from riverine flood disasters, and systematically quantifies the effectiveness of a menu of region-specific disaster risk reduction and management measures
Economics of Disaster Risk and Resilience in Small Island Developing States
No full textThe four essays investigate the impacts and implications of climate change and disasters in Small Island Developing States (SIDS) in the Pacific by examining disaster risk, resilience, response, and recovery in Tuvalu.
The first chapter starts with a survey on the conceptual framework of disaster risk which relies on its associated components of hazard, vulnerability and exposure. It is an introductory literature review that sets the scene for the other chapters. It is not intended to make an original contribution nor a critical review of the literature justified to be publishable. How we measure these risks depends on how we define disaster risk and its components. Though there are diverse views on these definitions in different disciplines, we can capitalise on their commonalities to frame disaster risk models.
The second chapter investigates the vulnerability of households to climatic disasters in Tuvalu. Small Island Developing States, particularly the atoll islands, are considered to be the most vulnerable to climatic change, and in particular to sea-level rise and its associated risks. From the Tuvalu Statistics Department household survey, we construct poverty and hardship profiles for households on the different islands of Tuvalu, and combine these with geographic and topographic information to assess the exposure differentials among different groups using spatial econometric models. Besides the observation that households in hardship are more vulnerable to negative shocks because they lack the resources to respond, we also find that they are also more likely to reside in highly exposed areas to disasters (closer to the coasts and at lower elevation) and have less ability to migrate (between and within the islands).
The third chapter examines cyclones. The intensity of cyclones in the Pacific is predicted to increase and sea levels are predicted to rise, so an atoll nation like Tuvalu can serve as the `canary in the coal mine' pointing to the new risks that are emerging because of climatic change. Based on a household survey we conducted in Tuvalu, we quantify the impacts of Tropical Cyclone Pam (March 2015) on households, and the determinants of these impacts in terms of hazard, exposure, vulnerability and responsiveness. Households experienced significant damage due to the storm surge caused by the cyclone, even though the cyclone itself passed very far away (about a 1,000 km). This risk of distant cyclones has been overlooked in the literature, and ignoring it leads to significant under-estimation of the disaster risk facing low-lying atoll islands. Lastly, we constructed hypothetical policy scenarios, and calculated the estimated loss and damage they would have been associated with { a first step in building careful assessments of the feasibility of various disaster risk reduction policies.
The fourth chapter examines the financing of disaster risk management. Future climate and disaster risks are likely to impose increasing financial pressure on the governments of low-lying atoll nations. The aftermath of a disaster such as a cyclone requires financial means for quick response and recovery. Hence, we quantify appropriate levels of financial support for expected disasters in Tuvalu and Kiribati by building on the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) calculated likely costs for disasters. To these, we add estimates of the potential effects of distant cyclones, droughts, sea level rise and climate change as they are predicted to affect low-lying atoll islands. There are several potential financial instruments available for disaster risk management in the Pacific Islands. We focus on the potential contribution of the sovereign wealth funds (SWF) of Tuvalu and Kiribati in reducing reliance on foreign aid for both ex-ante and ex-post disaster risk management. We forecast the future size of the SWF using Monte Carlo simulations and an Auto-Regressive Integrated Moving Average model. We examine the long-term sustainability of the SWF, and the feasibility of extending their mandate to cover and pay for at least some climate change adaptation and disaster risk reduction
Three essays on the adverse effects of weather extremes on local economic and health outcomes in Indonesia
No full textThe weather-economy nexus has long had close attention from scholars and policy makers as weather hazards often have a significant impact on socioeconomic outcomes of populations around the world. A continuous understanding of this relationship is vital for societies to deal well with weather risk. This is particularly important in relation to climate change, which is likely to worsen the consequences of extreme weather as their frequencies and intensities increase. This thesis consists of three essays that demonstrate the adverse effects of extreme weather episodes on the local economy, using publicly available weather data and economic data sources. The essays use Indonesia setting as a case study, but the findings are likely to also be relevant for the situation in other developing countries located in the tropics that face similar socioeconomic challenges dealing with weather risk. The first essay, having identified the robust link between drought and variations of agricultural yield in the last decades, assesses the viability of weather-index insurance (WII) scheme against drought risk for rice farmers. The results suggest WII can play a cost-effective risk reduction role in drought sensitive regions, such as Sulawesi. The timing of drought as an exogenous shock to household economic outcomes is important as indicated in the results of the second essay. The estimated adverse effects to household monthly incomes and expenditures begin in the following year the drought occurs. Besides affecting economic outcomes, extreme weather also drives variations in health-related outcomes of adult individuals. This is empirically identified in the third essay that finds a robust connection between extreme rainfall and health outcomes. The results confirm earlier findings that people face higher probabilities of being affected by diseases during adverse events, especially during dry months. Estimations on coping mechanisms suggest heterogeneous effects with respect to, for example, the role of insurance. Lastly, the third essay finds that extreme weather episodes are negatively associated with non-quantifiable subjective well-being and life satisfaction
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