Local public finance dynamics and hurricane shocks

Natural Disasters and Local Government Finance Evidence from Typhoon Haiyan

“…Depending on their initial states, such trend effects control for situations where the development paths of cities and municipalities, even without Haiyan, may differ over time. We use the pre-2013 values of these variables because we expect that the typhoon will affect the cities and municipalities differently, de-6 See for example Jerch et al, 2020. pending on their initial values. We also control for central government transfers to city or municipality i with the Philippine Internal Revenue Allotment (PIRA).…”

“…Recent studies on the fiscal consequences of natural disasters demonstrate the adverse effects on local government budgets and the important role of intergovernmental transfers (Jerch et al, 2020;Miao et al, 2020;Noy et al, 2021). Examining the heterogeneous effect of natural disasters on varying sizes of local governments, this literature shows that the fiscal budget of larger subnational governments tends to be more robust to a disaster than small towns/cities.…”

“…Our paper closely relates to Jerch et al (2020) that examines how hurricanes affect municipality budgets in the US. Our approach differs in several ways.…”

Mortgage Securitization Dynamics in the Aftermath of Natural Disasters: A Reply

“…An emerging natural disaster literature explores how shocks affects many aspects of the real economy (Boustan, Kahn, Rhode & Yanguas 2020). In the real economy, margins of adjustment include migration (Deryugina, Kawano & Levitt 2018, Smith, Carbone, Pope, Hallstrom & Darden 2022, home price declines (Ortega & Taspinar 2018, Cohen et al 2021, and public finance dynamics (Healy & Malhotra 2009, Jerch, Kahn & Lin 2023. In the financial sector, as investment and consumption are typically leveraged (Geanakoplos 2010) , margins of adjustment in response to climate risk exposure include the LTV ratios (Sastry 2021, Bakkensen et al 2023, interest rates and yields (Goldsmith-Pinkham, Gustafson, Lewis & Schwert 2022, Nguyen et al 2022), approval rates, amortization structures of loans.…”

Do Pandemics Change Healthcare? Evidence from the Great Influenza

“…First, we examine how external shocks may alter preferences for the provision of healthcare in the short-and longer-run, a topic that has thus far received little attention. The empirical literature on local public goods has suggested that large external shocks, such as pandemics, can alter the provision of local public goods through three mechanisms: changed preferences (Foster and Rosenzweig 1995;Gustafsson, Biel, and Garling 2000;Banerjee and Somanathan 2007;Cárdenas et al 2017;Duchoslav 2017;Cecchi and Duchoslav 2018), collective action (Alesina, Baqir, and Easterly 1999;de Janvry, Dequiedt, and Sadoulet 2014), and budget constraints (Feler and Senses 2017;Jerch, Kahn, and Lin 2020). This literature suggests that the expected effects of a large public health shock are ex ante unclear.…”