Tuesday, June 13, 2023

The regional economic impact of wildfires: Evidence from Southern Europe

Sarah Meier, Robert J.R. Elliott and Eric Strobl estimate the impact of wildfires on the growth rate of gross domestic product (GDP) and employment of regional economies in Southern Europe from 2011 to 2018. To this end the authors match Eurostat economic data with geospatial burned area perimeters based on satellite imagery for 233 Nomenclature of Territorial Units for Statistics (NUTS) 3 level regions in Portugal, Spain, Italy, and Greece. Their panel fixed effects instrumental variable estimation results suggest an average contemporary decrease in a region’s annual GDP growth rate of 0.11–0.18% conditional on having experienced at least one wildfire. For an average wildfire season this leads to a yearly production loss of 13–21 billion euros for Southern Europe. The impact on the employment growth rate is heterogeneous across economic activity types in that there is a decrease in the average annual employment growth rate for activities related to retail and tourism (e.g., transport, accommodation, food service activities) of 0.09–0.15%, offset by employment growth in insurance, real estate, administrative, and support service related activities of 0.13–0.22%.
Journal of Environmental Economics and Management via Elsevier Science Direct www.ScienceDirect.com
Volume 119; May, 2023, Pages 102823

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