The Impact of Socio-Economics and Climate Change on Tropical Cyclone Losses in the USA

23 Pages Posted: 29 Jun 2009

See all articles by Silvio Schmidt

Silvio Schmidt

affiliation not provided to SSRN

Claudia Kemfert

DIW Deutsches Institut für Wirtschaftsforschung

Peter Hoeppe

affiliation not provided to SSRN

Date Written: Septermber 2008

Abstract

Tropical cyclones that make landfall on the coast of the USA are causing increasing economic losses. It is assumed that the losses are largely due to socio-economic developments, i.e. growing wealth and greater settlement of exposed areas. However, it is also thought that the rise in losses is caused by increasing frequency of severe cyclones resulting from climate change. The object of this paper is to investigate how sensitive the losses are to socio-economic changes and climate changes and how these factors have evolved over the last 50 years. We will then draw conclusions about the part the factors concerned play in the observed increase in losses. For analysis purposes, storm loss is depicted as a function of the value of material assets affected by the storm (the capital stock) and storm intensity. The findings show the increase in losses due to socio-economic changes to have been approximately three times greater than that due to climate-induced changes.

Keywords: tropical cyclones, climate change, socio-economic impact, storm damage function

Suggested Citation

Schmidt, Silvio and Kemfert, Claudia and Hoeppe, Peter, The Impact of Socio-Economics and Climate Change on Tropical Cyclone Losses in the USA (Septermber 2008). DIW Berlin Discussion Paper No. 824, Available at SSRN: https://ssrn.com/abstract=1425547 or http://dx.doi.org/10.2139/ssrn.1425547

Silvio Schmidt (Contact Author)

affiliation not provided to SSRN ( email )

Claudia Kemfert

DIW Deutsches Institut für Wirtschaftsforschung ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Peter Hoeppe

affiliation not provided to SSRN ( email )

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