MEASURING THE FINANCIAL SHOCKS OF NATURAL DISASTERS

2018/02/08 by Qing Miao, Yilin Hou, Michael Abrigo +1 · 2 citations
Social Sciences · Environmental Science · Agricultural and Biological Sciences · #Disaster Management and Resilience #Flood Risk Assessment and Management #Agricultural risk and resilience

paper · doi:10.17310/ntj.2018.1.01

Abstract

This paper employs panel vector autoregression to examine the dynamic fiscal response to natural disasters. With 50-state, 1970–2013 panel data on state government finance and disaster damage, we estimate disaster impacts on revenue, expenditure, debt issuance, and federal-state transfers. We find that following a disaster, states increase program expenditure and receive more federal transfers. Disasters have limited impact on total tax revenues but amplify fluctuations in sales, income, and property tax revenues. Our findings suggest that disaster-induced additional spending is largely financed through federal transfers, which include not only disaster relief funds but also non-disaster-related public welfare assistance.

Citations

• Fiscal shocks and their consequences
• Biases in Dynamic Models with Fixed Effects
• Investigating Causal Relations by Econometric Models and Cross-spectral Methods

Cited by

• Natural disasters, property reappraisal, and fiscal outcomes
• Contracting Services for Response to Extreme Weather Events in Public Organizations

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