1. Long-term economic impact of disasters: Evidence from multiple earthquakes in China.
- Author
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Huang, Lulu, Liu, Qiannan, and Tang, Yugang
- Subjects
- *
EARTHQUAKES , *ECONOMIC impact , *INFRASTRUCTURE (Economics) , *SOCIAL capital , *NATURAL disasters - Abstract
• This paper examines the economic effects of multiple earthquakes in China using prefecture-level data and a DID approach. • Both moderate and strong earthquakes have a significant long-term negative effect on affected prefectures' GDP per capita. • Earthquakes' effects vary based on government fiscal autonomy, social capital intensity, and infrastructure development. • Household savings rate, fixed asset investment, and innovation mainly contribute to long-term negative effects. This paper examines the short-term and long-term economic impacts of relative-ly small but more frequent earthquakes in China. Using a difference-in-differences approach based on prefecture-level city panel data, combined with a unique data set on seismic events in China, we find that both moderate and strong earthquakes significantly decrease affected prefectures' GDP per capita in the long run. These effects vary depending on the level of local government fiscal autonomy, social capital intensity, and infrastructure development. We also find that three mechanisms contribute to long-term negative effects: the household savings rate, fixed asset investment, and innovation. Our results provide new insights for policymakers to address relatively small disasters, which can have a significant impact on the local economy in the long run. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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