The fiscal implications of hurricane strikes in the Caribbean

This paper empirically traces the fiscal impacts of hurricane strikes. To this end, a hurricane damage index is derived from a physical wind field model for a panel of Caribbean countries over 36 years. Results, based on panel VAR and impulse response functions analysis, show that, overall, hurricane strikes exert a short-term impact. Indeed, the study finds that the response of government spending is positive and significant while public investment, debt and tax revenue do not appear to respond (significantly) to hurricane strikes. Moreover, the study finds that Governments respond to hurricane strikes by engaging in short term deficit financing.     

Environmental Risk and Averting Behavior: Predictive Validity of Jointly Estimated Revealed and Stated Behavior Data

We conduct predictive validity tests using revealed and stated behavior data from a panel survey of North Carolina coastal households. The application is to hurricane evacuation behavior. Data was initially collected after Hurricane Bonnie led to hurricane evacuations in North Carolina in 1998. Respondents were asked for their behavioral intentions if a hurricane threatened the North Carolina coast during the 1999 hurricane season. Following Hurricanes Dennis and Floyd in 1999, a follow-up survey was conducted to see if respondents behaved as they intended. A jointly estimated revealed and stated behavior model indicates that the hypothetical and real evacuation behavior is based on the same choice process. Using predictions from this model with a hypothetical bias correction, we find that it predicts actual evacuation behavior with a small forecast error. These results suggest that stated behavior data has some degree of predictive validity.     

The economic growth impact of natural disasters in developing countries: Evidence from hurricane strikes in the Central American and Caribbean regions

In this paper we investigate the macroeconomic impact of natural disasters in developing countries by examining hurricane strikes in the Central American and Caribbean regions. Our innovation in this regard is to employ a wind field model on hurricane track data to arrive at a more scientifically based index of potential local destruction. This index allows us to identify damages at a detailed geographical level, compare hurricanes' destructiveness, as well as identify the countries that are most affected, without having to rely on potentially questionable monetary loss estimates. Combining our destruction index with macroeconomic data we show that the average hurricane strike caused output to fall by at least 0.83 percentage points in the region, although this depends on controlling for local economic characteristics of the country affected and what time of the year the storm strikes.     

Impact of hurricanes strikes on international reserves in the Caribbean

ABSTRACT

In this study, we investigate the impacts of hurricane shocks on the international reserves of Caribbean countries. To this end, we use a panel VARX (Vector Auto-Regressive, with exogenous variables) with monthly data that allow us to account for external shocks (hurricane strikes). Our results show that for the whole sample, an increase in foreign reserves a month after the strike was followed by a decrease 2 months later. The increase can be explained by remittances and emergency foreign aid granted by the International Monetary Fund. Dividing the sample into middle-income and high-income countries shows that the increase is mainly due to the latter. This outcome may not be surprising given that production in Caribbean high-income countries is mainly due to manufacturing, off-shore banking and natural resources exploitation, which are all non-weather dependent sectors, while the middle-income countries are mostly dependent on weather-prone agriculture and tourism.     

Price gouging versus price reduction in retail gasoline markets during Hurricane Rita

Using extensive hand-collected retail gas prices, I show that there was no price gouging in Bryan/College Station during Hurricane Rita. Instead, the retail price markup dropped by twelve cents during the hurricane, despite most stations running out of gas.     

Valuing improved hurricane forecasts

The value to households of improved hurricane forecasts is estimated from a pilot survey using discrete choice econometric methods. Each household is willing to pay approximately $13 for improvements in forecast attributes such as landfall time and position, wind speed, and storm surge.     

美国的极端天气预警及气候灾害应急机制研究

美国在总结暴雪、飓风、龙卷风、森林火灾等自然灾害的教训基础上,加强了对极端天气的预测和监测,不断完善对极端天气引发灾害的应急机制,提高基础设施的抗灾能力,注重对公民的减灾救灾教育.针对我国受灾地区在此次雪灾中暴露的薄弱环节,调研认为,我国应加强对重大气候灾害的精确预测和估计,增强基础设施抵御自然灾害的能力,在实践中不断完善各级政府的应急机制.     

Can Natural Experiments Measure Behavioral Responses to Environmental Risks?

Efforts to measure people’s responses to spatially delineated risks confront the potential for correlation between these risks and other, unobserved characteristics of these locations. The possibility of correlation arises in part because individuals observe other locational attributes that can be expected to influence the hedonic equilibrium. One response to this problem is to use events from nature to exploit both temporal and spatial variation in the behavioral responses of interest. This paper evaluates the use of hurricanes as a source of new risk information to households in coastal counties potentially subject to the effects of these storms. We study the extent to which housing prices before and after hurricane Andrew, a hurricane with unprecedented property loss, reveal how Floridians responded to the risk information provided by the storm. Two counties are selected – one without and another with damage from the hurricane. To evaluate the plausibility of using quasi-random experiments for locations not directly affected by natural events, we compare Lee County’s results to those of Dade County, where the majority of the damage occurred. Our findings suggest, after controlling for ex post storm damage and changes in insurance markets, there is a reasonably high level of consistency in a repeat sales model’s ability to estimate the effects of the risk information conveyed by the storm for both counties. Department of Economics, Williams College, Affiliated Economist, CEnREP, North Carolina State University and University Distinguished Professor, North Carolina State University, and Resources for the Future University Fellow, respectively. Senior authorship is not assigned. Thanks are due to Shelby Gerking and two anonymous reviewers for careful and constructive comments that substantially improved the paper. Michael Darden and Jaren Pope provided excellent research assistance and Alex Boutaud and Susan Hinton helped to make sense out of numerous drafts of this work. Smith’s contribution was partially supported by the United States Department of Homeland Security through the Center for Risk and Economic Analysis of Terrorism Events (CREATE), grant number EMW-2004-GR-0112. However, any opinion, findings, and conclusions or recommendations in this document are those of the author(s) and do not necessarily reflect views of the U.S. Department of Homeland Security.     

Using intervention analysis to assess catastrophic events on business environment

This article describes the use of Autoregressive Interactive Moving Average with impact assessment (intervention analysis) on a time series. In this case, a search was made for sudden changes in the business environment when a natural disaster struck a community. The catastrophic event was hurricane Hugo. Data were obtained from a public hospital. Admissions, outpatient visits, and emergency room visits were examined. All showed a significant increase in activity, not only for the period immediately following the event, but also for at least two years following the storm. Studies indicate that the long-term clean-up and reconstruction activities may have increased this public facility's case load in a manner somewhat different from other community hospitals.     

Measuring catastrophic events on operating viability of firms: hurricane hugo and hospitals

It is important to be able to separate and analyze the effects of sudden changes in the operating environments of firms. Although man-made changes can be studied with the techniques employed in this paper, the effects of a natural disaster are examined here. A model is developed to isolate and make available for study the immediate, short-run and long-run effects of hurricane Hugo on hospitals in its path. This paper reports on the most seriously affected hospitals. Managers as well as regional and national policy makers should be able to isolate and examine the effects of important natural, administrative, and legislated changes in an industry's operating environment. This paper gives one example of how this may be accomplished.Data collection for this study was partially funded by a grant from the Duke Endowment.     

The impact of work and non‐work migration on household welfare,poverty and inequality

This article estimates the impact of work migration and non‐work migration on per capita income, per capita expenditures, poverty and inequality in Vietnam using data from the two most recent Vietnam Household and Living Standard Surveys. We find that both work migration and non‐work migration have a positive impact on per capita expenditures of migrant‐sending households. Non‐work migration significantly decreases the incidence, depth and severity of national poverty. The effect of work migration on poverty is much smaller. Still, while work migration does not lift people out of poverty, it makes their poverty less severe. In addition, both work migration and non‐work migration decrease inequality, albeit only very slightly.     

户籍管制、基本公共服务供给与城市化——基于城市特征与流动人口监测数据的经验分析

本文在理论分析户籍管制、基本公共服务供给对城市化影响的基础上，利用2015年240个城市特征数据与2016年流动人口监测微观数据进行了实证检验。研究结果显示，户籍管制抑制了流动人口迁移的稳定性与完整性，是城市选择性吸纳高禀赋人口的重要制度工具。提高基本公共服务供给有助于促进流动人口自身稳定与家庭完整迁移，但基本公共服务的正向作用不足以抵消户籍管制的负向影响。研究结果还发现户籍管制、基本公共服务供给对流动人口迁移稳定性与完整性的影响存在个体差异。户籍管制制约了新生代流动人口迁移的稳定性与完整性，增加基本公共服务供给则有利于新生代流动人口与高禀赋人口的稳定与完整迁移。     

Efficiency Gains from Liberalizing Labor Mobility

In this paper, we quantify the effect of a complete liberalization of cross‐border migration on the world GDP and its distribution across regions. We build a general equilibrium model, endogenizing bilateral migration and income disparities between and within countries. Our calibration strategy uses data on effective and potential migration to identify total migration costs and visa costs by education level. Data on potential migration reveal that the number of people in the world who have a desire to migrate is around 400 million. This number is much smaller than that predicted in previous studies, and reflects the existence of high “incompressible” migration costs. In our benchmark framework, liberalizing migration increases the world GDP by 11.5–12.5 percent in the medium term. Our robustness analysis reveals that the gains are always limited, in the range of 7.0 percent (with schooling externalities) to 17.9 percent (if network effects are accounted for).     

On the importance of public choice in migration models

"Recent general equilibrium Tiebout models that use single-crossing indifference curves to establish a migration equilibrium incorporate both voting and migration decisions. These models have concentrated on the important question of the existence of an equilibrium, but the incorporation of both voting and migration has important efficiency consequences as well. This paper demonstrates the important effect of the interaction of voting and migration on efficiency conditions by showing that head taxes (which are generally considered to provide efficient migration incentives with constant marginal congestion costs) do not provide incentives for efficient migration decisions unless the public choice mechanism results in optimal public service provision within jurisdictions."     

Age Patterns of China's Repeat Migration

This study analyzes the relationship between the age of first migration and the probability of repeat migration focusing on rural to urban migrants in China. It is based on the data of the 2015 Migrant Dynamics Monitoring Survey (MDMS). The data shows that 52.64% of migrants had experienced repeat migration before 2015, the amount of which is huge. The empirical results indicate an inverted U-shaped connection between age of first migration and the probability of repeat migration. The probability of making repeat migration from rural to urban areas reaches its peak if an individual experienced his/her first migration at around 16 years old. The probability for repeat migration continues to increase before the age of 16 and keeps dropping afterward. Additionally, this study explores the reason for this inverse U-shaped relationship, and it finds that reasons for first migration have great impacts. Specifically, the probability of repeat migration goes up with age if an individual first migrates before age 16 and is accompanied by parents. This probability decreases with age, if an individual first migrates after or at age 16, because of work.     

Migration and Regional Trade Agreements: A (New) Gravity Estimation

This paper investigates the role of regional trade agreements (RTAs) on bilateral international migration. Building on a gravity model for migration, our econometric strategy controls for the multilateral resistance to migration and solves the zero migration flows problem by using a censored quantile regression approach. Further, the endogeneity problem of RTAs in migration settlement is addressed by using instrumental variable censored quantile regression. Our results suggest that the presence of a RTA stimulates the migration stocks among member countries. The pro‐migration effect of RTAs is magnified if the agreement includes also provisions easing bureaucratic procedures for visa and asylum among member countries. Finally, we find an asymmetric effect of RTAs across the quantiles of the distribution of migration settlements.     

How Borrowing Constraints Hinder Migration: Theoretical Insights from a Random Utility Maximization Model*

We provide a theoretical framework to analyze how financial constraints hinder migration. Introducing wealth heterogeneity and borrowing constraints into a random utility maximization model of migration, we find evidence of multilateral resistance to migration stemming from borrowing constraints. We calibrate the model on 22 European countries, and we show that omitting the constraints biases upward the estimation of bilateral migration rates. We then simulate an increase in the bilateral cost of migration to the United Kingdom. We find that omitting the constraints biases downward the change entailed by the cost increase in the bilateral rates of migration to all destinations.     

农村劳动力转移影响因素分析:29个省市的经验数据

在分析和评价传统理论和已有文献的基础上,突破单一的城乡收入差距影响农村劳动力转移的传统思维,构建出农村劳动力转移不仅受迁移地非农收入的实际效用因素的影响,受迁移成本变动因素影响的理论模型。根据全国29个省市1995-2006年的面板数据,经过单位根检验和协整关系检验,利用回归模型,估计分析了非农收入的实际效用因素和非农收入成本因素对农村劳动力转移的影响度。城乡收入差距、非农产业生产总值比率与农村劳动力转移呈正相关,城乡消费支出比率、城镇失业率分别作为农村劳动力转移的直接价格成本和就业风险成本与农村劳动力转移呈负相关关系。要进一步促进我国农村劳动力向城镇的合理转移,必须从两个方面着手:一是提高非农收入的实际效用,二是降低非农收入的成本率。     

Ethnic discrimination and the migration of skilled labor

We develop a model of interdependency between emigration, education investment, and discrimination, in the context of an ethnically divided developing economy. Assuming a rent-extraction basis for discrimination, we first endogenize ethnic discrimination in the benchmark case of an economy closed to migration, and then explore how migration prospects affect ethnic inequality. Under the free migration assumption, we find the intuitive result that migration prospects have a protective effect on the minority. Immigration restrictions set by receiving countries, on the other hand, have the paradoxical effect of creating migration flows that would otherwise have remained latent.     

中国省际居民迁移与地方公共支出——基于引力模型的经验研究

文章运用居民迁移的引力模型对我国省级居民迁移与地方公共支出的相关性进行了实证研究.通过对1990年以来的人口普查和抽样调查面板数据的回归分析发现:地方公共支出差异在2000年之前的居民迁移中作用不显著,而在2000年、2005年的迁移中有显著影响.对于迁入地、迁出地地方公共支出,2000年之前的迁移主要受迁入地的拉力作用,而在2000年之后则主要受迁出地的推力作用.