Medium-run local economic effects of a major earthquake

Medium-run local economic effects of a major earthquake
AuthorPaula Aguirre, Kenzo Asahi, Diego Diaz-Rioseco, Ignacio Riveros, Rodrigo O Valdés
Line(s)Acceso y movilidad
Year of Publication2022
Journal TitleJournal of Economic Geography
Existing research is inconclusive regarding the longer-term economic effects of earthquakes. We examine the medium-run impacts of the 2010 earthquake in Chile, the sixth-largest ever recorded, using value-added tax collection as a proxy for economic activity at the municipal level and a measure of local ground-shaking intensity. We find that the affected municipalities suffered a relevant and persistent drop in their economic activity of about 10%, 8–9 years after the event. We discuss the plausibility of the assumption of conditional parallel trends and show that the overall results are robust to using alternative estimation methods.
Corresponding AuthorKenzo Asahi