Macroeconomics of Natural Disasters: Strengths and Weaknesses of Meta‐Analysis Versus Review of Literature

Abstract

We use the case of the macroeconomic impact of natural disasters to analyze strengths and weaknesses of meta-analysis in an emerging research field. Macroeconomists have published on this issue since 2002 (we identified 60 studies to date). The results of the studies are contradictory and therefore the need to synthesize the available research is evident. Meta-analysis is a useful method in this field. An important aim of our article is to show how one can use the identified methodological characteristics to better understand the robustness and importance of new findings. To provide a comparative perspective, we contrast our meta-analysis and its findings with the major influential research synthesis in the field: the IPCC's 2012 special report Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation. We show that the IPCC could have been more confident about the negative economic impact of disasters and more transparent on inclusion and qualification of studies, if it had been complemented by a meta-analysis. Our meta-analysis shows that, controlling for modeling strategies and data set, the impact of disasters is significantly negative. The evidence is strongest for direct costs studies where we see no difference between our larger sample and the studies included in the IPCC report. Direct cost studies and indirect cost studies differ significantly, both in terms of the confidence that can be attached to a negative impact of natural disasters and in terms of the sources of heterogeneity of the findings reported in the primary studies.

Natural disasters and economic growth: a synthesis of empirical evidence

“…A negative combined effect implies that the occurrence of a natural disaster significantly reduces the GDP growth rate of the affected area. This is consistent with what was previously reported (Lazzaroni and van Bergeijk, 2013;Klomp and Valckx, 2014;van Bergeijk and Lazzaroni, 2015).…”

“…Previously, three studies have advanced in the joint study -by means of meta-analysis techniques-of the existing empirical evidence on the impact of natural disasters on economic growth (Lazzaroni and van Bergeijk, 2013;Klomp and Valckx, 2014;van Bergeijk and Lazzaroni, 2015). Lazzaroni and van Bergeijk (2013) find mixed results when considering publications made between 2002-2013 and using a multinomial logistic model.…”

“…The authors also find evidence in favour of the existence of publication bias among the studies considered 27 . van Bergeijk and Lazzaroni (2015) proceed with a meta-analysis on the same topic and contrast their results with those that arise from a systematic review of the literature 27-That is, the reported effect is proportional to its standard deviation. Smaller studies (with a smaller sample size and, therefore, greater standard error) report larger effects in absolute value.…”

Forecasting societies' adaptive capacities through a demographic metabolism model

“…For example, the destruction of expensive houses by storms that rich people built in highly exposed coastal locations is not considered in our approach to studying adaptive capacities. Moreover, there is no consistent measure of total economic losses 6 and the evidence on a negative impact of natural disasters, especially on indirect loss, remains inconclusive 7 . For this reason, our arguments do not relate adaptive capacity to potential economic loss.…”

Blessing in disguise: long-run benefits of urban disasters

“…The geographical scale level of a disaster impact assessment may range from a macro perspective (see, e.g., Skidmore and Toya 2002) to a local (regional and urban) angle (see, e.g., Baade et al 2007;Chang 2010; Coff man and Noy 2011; Okuyama 2015). It is also noteworthy that a need for a more systematic impact assessment has emerged, as refl ected in some recent meta-analytical studies (see, e.g., Lazzaroni and van Bergeijk 2014;van Bergeijk and Lazzaroni 2015).…”