Abstract
Natural disasters have always been representing a major source of threat that not only disrupts personal wealth accumulation, but also causes emotional impairment upon occurrence. What further worsens the current situation is the materialisation of shifting climatic patterns is forecasted to increase both frequency and intensity of extreme weather events in the coming future. Given the increasing threat arisen from climate change, the first study suggests measures that government can take into consideration so as to protect local citizens’ overall quality of life against unfavourable weather events. The other two studies provide additional insights of how natural hazard can exert its destructive damage to areas located faraway from disaster zones. In particular, the following provides brief summaries of three studies:(i) In the first study (Chapter 2), we provide evidence showing that state environmental policies alleviate the negative relation between adverse weather condition, i.e. temperatures rise, and quality of life. The positive effect, along which health and income dimension react the strongest, is more pronounced in areas whose authorities pay more effort in expanding and implementing the scope of regulations during abnormally hot summers. We rule out the concern of other factors might drive our findings by using either propensity score matching or pair analyses along state borders. Given result persistency across different income and urbanity spectrums in either within- or across-states analysis, our findings provide potential measures that local authorities can implement to protect overall quality of life;
(ii) The second study (Chapter 3) examines the effect of wildfire by-product – i.e. smoke – on establishment operation and local business outlook. On the one hand, the number of wildfire smoke days negatively predict both annual sales and employment at establishment level. On the other hand, smoke incidences stagnate both establishment counts and growth rate, suggesting that long-term business decisions are affected by indirect exposure to wildfire disasters. Consistent with sporadic smoke occurrence, we find no pre-treatment effect of smoke; and the observed effects persist for a single year. We eliminate alternative explanations by using different sample reconstruction techniques, and prove our result robustness across different fixed-effects. Notably, smoke manifests its adverse effect primarily in services, as opposed to tradable good production, suggesting that local demand, and not labor, drives the observed effects. Our findings suggest that there are substantial indirect economic effects of wildfires, and call for broad estimates of climate risks that wholly take into account of both direct and indirect effects;
(iii) Last, the third study (Chapter 4) finds that wildfire smoke deteriorates both housing valuation and real estate market liquidity. Using 2010-2019 housing transaction data in the U.S, we find that smoke-exposed listings experience longer outstanding days and suffer a widening opening-closing price spectrum, thus reducing overall property market activity. The exogeneity of smoke incidence to local economic activities suggests a causal relationship of how wildland-fire by-product predicts the U.S. housing market activities. We find that the effect of smoke concentrates in multiple-exposed regions within a year, or in areas whose population is generally concerned about climate change. Smoke strands property market liquidity up to one-year before dissipating thereafter. Our results show that property market illiquidity in smoke-exposed areas is manifested via migration channel.
| Date of Award | 17 Jan 2024 |
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| Original language | English |
| Awarding Institution |
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| Supervisor | Dimitrios Gounopoulos (Supervisor) & David Newton (Supervisor) |