A Robust Analysis of the Relationship between Natural Disasters, Electricity and Economic Growth in 41 Countries

By Benali, Nadia; Saidi, Kais | Journal of Economic Development, September 2017 | Go to article overview

A Robust Analysis of the Relationship between Natural Disasters, Electricity and Economic Growth in 41 Countries


Benali, Nadia, Saidi, Kais, Journal of Economic Development


(ProQuest: ... denotes formulae omitted.)

1. INTRODUCTION

Natural disasters are now better known. They are well investigated and mapped both locally and global scale. Natural disasters are liable to cause serious economic and social disruption. The immediate damage is decrease production, expenditures and the number of hours worked. According to the data reported by EM-DAT, Americas suffered in 2014 from 76 natural disasters and the damage reached US$ 25.8 billion. On the other side, Africa suffered from 39 natural disasters, a number far below its 2004-2013 annual average. According to EM-DAT (2014), the damages from natural disasters in European countries represent approximately US$ 7.8 billion.

The occurrence of natural disasters such as earthquakes, hurricanes, tornadoes, floods, storms and volcanic eruptions have negative effects on the electrical system operation. The earthquakes that have hit several countries such as China, Italy, Japan and the United States have severe impact economic, environmental and human. In addition, they destroyed their power system equipment.

The response of the authorities has led in practice by the implementation of prevention and risk management systems evolving since the 1980s, resulting in an abundance of tools and acronyms that thwarts their ownership all players. In the period immediately following the event, reconstruction efforts are offset these losses and, paradoxically, create a net stimulatory effect on economic growth. To achieve this objective, it is necessary to measure or estimate economic costs of such disasters. In this sense, many studies have examined the debate in a macro-economic perspective by exploring how disasters affect real GDP per capita.

In general, economic effects due to disasters can be classified into two categories: direct damage and indirect damage. The main findings shown that the direct effects of natural disasters depend on the level of development of the affected countries (Kahn, 2005).Most empirical studies have shown that natural disasters have a negative indirect damage in short-term, such as effects on economic growth (Noy, 2009; Fomby et al., 2013). Although long-term studies are still relatively rare and yet failed to provide consistent results (Skidmore and Toya, 2002; Noy and Nualsri, 2007; Jaramillo, 2009.).

The contribution of this article is to assess the effects of natural disaster on economic growth, physical capital, labor and electricity. Furthermore, our study of literature suggests that few studies have examined the impact of natural disaster on the electricity. For this purpose, we use a Panel data and Granger causality-VECM model, including four types of disasters (earthquakes, storms, floods and droughts) in about 41 countries over the period 1990 to 2014.

The sections of this paper presented as follows. The literature review section presents a brief literature review. The data section details the data used in the empirical part. The descriptive statistics and correlation matrix section summarizes the key statistics and correlation of the total variables. The model specification section describes the econometric method. The estimation methods and empirical results section discusses the empirical findings. Finally, conclusion and policy implications section.

2. REVIEW OF THE RELEVANT LITERATURE

2.1.Natural Disaster and Economic Growth

There is a considerable attention in literature about the impact of natural disaster on economic growth. For instance, Albala-Bertrand (1993) investigated the effects of natural disaster on the economy and society in developing countries. He concluded that in reality disasters do not represent a problem for development. Benson (1997a, b, and c), Benson and Clay (1998, 2001) evaluated the impact of natural disasters on economic growth in some countries such as Fiji, Vietnam, Philippines, and Dominica. The findings showed that disasters shocks have a severe negative short-run economic consequence, with increase of property, and worsening inequalities. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

A Robust Analysis of the Relationship between Natural Disasters, Electricity and Economic Growth in 41 Countries
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.