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Environmental and Resource Economics

, Volume 73, Issue 1, pp 181–211 | Cite as

Weathering Storms: Understanding the Impact of Natural Disasters in Central America

  • Oscar A. Ishizawa
  • Juan Jose MirandaEmail author
Article

Abstract

In the past decades, natural disasters have caused substantial human and economic losses in Central America, with strong adverse impacts on gross domestic product per capita, income, and poverty reduction. This study provides a regional perspective on the short-term impact of hurricane windstorms on socioeconomic indicators. Apart from modeling the socioeconomic impact at the macro and micro levels, the study incorporates and juxtaposes data from a hurricane windstorm model categorizing three hurricane damage indexes, which lends a higher level of detail, nuance, and therefore accuracy and comprehensiveness to the study. One standard deviation in the intensity of a hurricane windstorm leads to a decrease in growth of total per capita gross domestic product of between 0.9 and 1.6%, and a decrease in total income and labor income by 3%, which in turn increases moderate and extreme poverty by 1.5 percentage points. These results demonstrate the causal relationship between hurricane windstorm impacts and poverty in Central America, producing regional evidence that could improve targeting of disaster risk management policies toward those most impacted and thus whose needs are greatest.

Keywords

Hurricanes Poverty Natural disasters Central America Economic growth Vulnerability 

JEL Classification

O11 O12 O44 Q51 Q54 R11 

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Copyright information

© Springer Science+Business Media B.V., part of Springer Nature 2018

Authors and Affiliations

  1. 1.Social, Urban, Rural and Resilience Global Practice (GSURR)The World BankWashington D.C.USA
  2. 2.Environment and Natural Resources Global Practice (GENDR)The World BankWashington D.C.USA

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