Unpacking the sectoral income effects of natural disasters: evidence from the 2010-11 Queensland floods
|Title||Unpacking the sectoral income effects of natural disasters: evidence from the 2010-11 Queensland floods|
|Publication Type||Conference Paper|
|Year of Publication||2017|
|Authors||Ulubasoglu, M, Rahman, M|
|Publisher||Bushfire and Natural Hazards CRC|
The past few decades witnessed a rapid increase of researches that rigorously investigated the nexus between economic performances and natural disasters. However, the rise of the interest in studying this nexus is not surprising provided that natural disasters trigger severe destruction in capital stocks and incur disruption in income flows. As such, the focus of many the studies is on demonstrating disaster shock impacts on outcomes such as agricultural output, industrial output, labor productivity, energy demand, health, conflict, and economic growth, among others (Dell M. et al, 2014). This paper estimates the impact of the 2010-11 Queensland Floods on sectoral income level using the Australian Census Longitudinal Dataset (ACLD), which brings together a nationally representative 5% sample from the 2006 Census with records from the 2011 Census of Australia. In our empirical setting, we treat the 2010-11 Queensland floods as a natural experiment by treating the flood-affected group of individuals as the treatment group, while treating the rest of the Queenslanders remains as the control group. This approach enables us to compare the economic differences in before (2006 Census) and after (2011 Census) the event between the group of flood-affected individuals and their counterfactuals. Our estimates indicate that the 2010-11 Queensland floods incident has no bearing on overall gross state product (GSP), but it adversely affects individuals working in construction, and accommodation and food services. However, Queenslanders working in retail trade, transport, postal and warehousing, and rental, hiring and real estate services cashed in opportunities brought by this catastrophic event. In addition, we find that the 2010-11 Queensland floods hit the lower income-group the hardest in terms of their loss in annual income. Our findings have several policy implications in that government’s budgetary allocations related to disaster risk reduction programs should vary across sectors and group of individuals in accordance with their potential disaster effects.