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The Impact of Typhoons on Economic Activity in the Philippines: Evidence from Nightlight Intensity

Publication | July 2019
The Impact of Typhoons on Economic Activity in the Philippines: Evidence from Nightlight Intensity

This working paper presents the significant negative but short-lived impact of typhoons on local economic activity in the Philippines, as shown by the intensity of light usage at night measured from satellites.

Typhoons are shown to have a significant negative, but short-lived impact on local economic activity in the Philippines, as proxied by the intensity of light usage at night measured from satellites. Using this proxy, an analysis of the historical distribution of typhoons was conducted to predict future impacts. A key finding was that frequent, low-damaging typhoons are likely to reduce local economic activity by around 1%, while rarer, but more intense typhoons, will cause a reduction of up to nearly 3%. Another finding was that the severity of the impacts will differ widely between regions in the Philippines.

Contents 

  • Introduction
  • Data and Methodology
    • Nighlights
    • Grid Cell Level Typhoon Damages
    • Summary Statistics
  • Econometric Analysis
    • Regression Framework
    • Econometric Results
  • Risk Analysis
    • Extreme Value Analysis
    • Threshold Selection
    • Results
  • Conclusions