The Impact of Hurricane Strikes on Short-Term Local Economic Activity: Evidence from Nightlight Images in the Dominican Republic

The Dominican Republic is highly exposed to adverse natural events putting the country at risk of losing hard-won economic, social, and environmental gains due to the impacts of disasters. This study uses monthly nightlight composites in conjunction with a wind field model to econometrically estimate the impact of tropical cyclones on local economic activity in the Dominican Republic since 1992. It is found that the negative impact of storms lasts up to 15 months after the strike, with the largest effect observed after nine months. Translating the reduction in nightlight intensity into monetary losses by relating it to quarterly gross domestic product suggests that on average the storms reduced gross domestic product by about US$1.1 billion (4.5 percent of gross domestic product in 2000 and 1.5 percent in 2016).