Large indirect income impacts of tropical cyclones shaped by disaster response

Christopher Callahan, Jane Baldwin, Renzhi Jing, Marshall Burke, Noah S Diffenbaugh

Tropical cyclones (TCs) have direct economic impacts, destroying property and infrastructure. However, the sign and magnitude of their indirect impacts via longer-term changes in economic output remain unclear. Here we use data on TC winds and rainfall combined with county-level income in the U.S. to quantify the long-term indirect impacts of TCs. We find a nonlinear response of income growth to TC winds, where damages initially increase with wind speed but diminish for the strongest winds. In contrast, we find a simpler linear response of reduced income growth with TC rainfall. We show that this discrepancy is likely due to the compensating effect of disaster aid following high winds, which appears to respond more strongly to TC winds than rainfall. Aggregating over recent decades, we find that TCs have reduced U.S. income by $34 trillion over 1980-2019, >25 times their direct losses, but estimate that losses would have been more than 50% larger absent disaster aid. These findings highlight that disaster response can ameliorate indirect disaster impacts, but that to date such responses have only partially avoided large accumulating losses from TCs.