The growth effects of tropical cyclones in the U.S.: new evidence from state to county level

TL;DR

This study investigates the regional economic growth impacts of tropical cyclones in the U.S., revealing significant negative effects at state and county levels, especially in Florida, highlighting heterogeneity in disaster effects.

Contribution

It provides new evidence that tropical cyclone impacts on growth are significant at regional levels, emphasizing the importance of localized analysis over national aggregates.

Findings

Significant short-term negative effects in Florida

No significant effects in country-wide samples

Heterogeneity in cyclone impact across regions

Abstract

Tropical cyclones have always been a concern for public authorities in the U.S., with a season lasting nearly half of the year. Using longitudinal data on economic growth and exposure to tropical cyclones, we provide new comprehensive analyses of these disasters' growth impact in U.S. states and counties. While we find that results remain insignificant with country-wide samples, this study shows that the effects can be, instead, significant at regional level. In fact, a specific analysis of Florida State stresses significant short-term negative effects, both at county and state levels. At this stage, this study calls for an in-depth investigation of the underlying mechanisms leading to such growth depletion but already pins down the important heterogeneity in the effects of a catastrophe on growth patterns within a country.