The welfare impact of a natural disaster depends on its effect on consumption, not only on the direct asset losses and human losses that are usually estimated and reported after disasters. This paper proposes a framework to assess disaster-related consumption losses, starting from an estimate of the asset losses, and leading to the following findings. First, output losses after a disaster destroys part of the capital stock are better estimated by using the average—not the marginal—productivity of capital. A model that describes capital in the economy as a single homogeneous stock would systematically underestimate disaster output losses, compared with a model that tracks capital in different sectors with limited reallocation options. Second, the net present value of disaster-caused consumption losses decreases when reconstruction is accelerated. With standard parameters, discounted consumption losses are only 10 percent larger than asset losses if reconstruction is completed in one year, compared with 80 percent if reconstruction takes 10 years. Third, for disasters of similar magnitude, consumption losses are expected to be lower where the productivity of capital is higher, such as in capital-scarce developing countries. This mechanism may partly compensate for the many other factors that make poor countries and poor people more vulnerable to disasters.
Detalhes
-
Autor
-
Data do documento
2016/11/14
-
TIpo de documento
Documento de trabalho sobre pesquisa de políticas
-
No. do relatório
WPS7885
-
Nº do volume
1
-
Total Volume(s)
1
-
País
-
Região
-
Data de divulgação
2016/11/14
-
Disclosure Status
Disclosed
-
Nome do documento
Are losses from natural disasters more than just asset losses ? the role of capital aggregation, sector interactions, and investment behaviors
-
Palavras-chave
productivity of capital;net present value;effect on consumption;asset loss;consumption loss;output loss;natural disaster;welfare impact;production function;development policy;capital stock;open access;
- Exibir mais
Downloads
COMPLETAR RELATÓRIO
Versão oficial do documento (pode conter assinaturas, etc.)
- PDF oficial
- TXT*
- Total Downloads** :
- Download Stats
-
*A versão do texto é um OCR incorreto e está incluído unicamente em benefício de usuários com conectividade lenta.