MEASURING THE FINANCIAL SHOCKS OF NATURAL DISASTERS

• DOI: 10.17310/ntj.2018.1.01
• Publication Date: 2018-02-08T21:15:04Z
• Authors: Qing Miao; Yilin Hou; Michael Abrigo
• Keywords: Vector autoregression; Property tax

This paper employs panel vector autoregression to examine the dynamic fiscal response natural disasters. With 50-state, 1970–2013 data on state government finance and disaster damage, we estimate impacts revenue, expenditure, debt issuance, federal-state transfers. We find that following a disaster, states increase program expenditure receive more federal Disasters have limited impact total tax revenues but amplify fluctuations in sales, income, property revenues. Our findings suggest disaster-induced additional spending is largely financed through transfers, which include not only relief funds also non-disaster-related public welfare assistance.