elasticity of deaths due to natural disasters vs. income

March 1, 2010



Going back to hammer in the topic of economic freedom, Matt Kahn has a paper on the topic of the elasticity of deaths due to natural disasters vs. income which states this in the Abstract:


Though richer nations do not experience fewer natural disasters than poorer nations, richer nations do suffer less death from disaster. Economic development provides implicit insurance against nature’s shocks. Democracies and nations with higher-quality institutions suffer less death from natural disaster. Because climate change is expected to increase the frequency of natural disasters such as floods, these results have implications for the incidence of global warming.


The paper concludes:

Death counts differ sharply by continent. African nations experience fewer natural disasters and all else equal, suffer less death from natural disasters. Unlike other Institutions play a role in shielding the population from natural disaster death. Future research should pinpoint the mechanisms.

This paper has shown using several empirical models, that controlling for national income, less democratic nations and nations with more income inequality suffer more death. Controlling for a nation’s population size and geography, I showed using OLS and instrumental variable estimates that a host of institutional quality proxies lower national death counts from disasters.

One important hypothesis that merits future research is the role of government corruption in exacerbating death counts from natural disaster. Existing corruption indices are highly negatively correlated with national per-capita income. It is quite plausible that government corruption raises death counts through the lack of enforcement of building codes, infrastructure quality, and zoning enforcement.