Research

Abstract: Hurricanes cause extensive coastal damage, yet development and population growth in coastal areas remains disproportionately high, in part due to growth in tourism. Using a difference-in-differences methodology and accounting for location characteristics, I estimate the impact of hurricanes on economic activity through changes in nighttime lights. In tourism-intensive coastal areas, hurricanes cause a persistent (5-year) reduction in economic activity (as seen in a 7 percent drop in lights); in other coastal areas, hurricanes cause a similar reduction, but only for a single year. The slower recovery of tourism-intensive areas is due to reductions in actual tourism, and possibly substitution to other touristic destinations.