not necessarily correct.
The previous literature has dealt with the effect of distance, that is, how close a stormpasses to a country, by either focusing only on tropical cyclones that make landfall (that is the case for all the studies that focus only on the US), or by using wind-field models. 22 Using a wind-field model has the advantage of providing a more precise measure of the wind speeds that affected each grid-cell; however, the quality and accuracy of those estimates depend on how good the wind-field model is in incorporating the
This paper studies the economic costs of hurricanes in the Caribbean by constructing a novel dataset that combines a detailed record of tropical cyclones’ characteristics with reported damages. I estimate the relation between hurricane wind speeds and damages in the Caribbean; finding that the elasticity of damages to GDP ratio with respect to maximum wind speeds is three in the case of landfalls. The data show that hurricane damages are considerably underreported, particularly in the 1950s and 1960s, with average damages potentially being three times as large as the reported average of 1.6 percent of GDP per year. I document and show that hurricanes that do not make landfall also have considerable negative impacts on the Caribbean economies. Finally, I estimate that the average annual hurricane damages in the Caribbean will increase between 22 and 77 percent by the year 2100, in a global warming scenario of high CO2 concentrations and high global temperatures.
have examined the macroeconomic impact of tropical cyclones, typically finding significant economic damage. 3 The analysis in this box combines detailed data on maximum sustained wind speed and settlements’ population to construct a comprehensive database of tropical storms that took place near centers of economic activity. 4 Between 1950 and 2016, 4,597 stormspassed within 100 miles of a city, affecting 3,113 cities in 132 countries or territories.
Tropical cyclones affect countries of different sizes, from small islands in the Caribbean and the Pacific to