Disasters Down Under: Assessing the Local Economic Impacts of Natural Disasters in Australia

Abstract

This thesis examines the economic impacts of natural disasters on local economies in Australia, focusing on the recovery dynamics of average income and new business creation in affected areas. To do so, I estimate the impact of various types of natural disasters (storms, tropical cyclones, wildfires and floods), taking into consideration short and run long effects as well as and the moderating effect of characteristics of the impacted localities. Utilising a novel, granular time series panel data set and a fixed effects linear regression framework, the study finds significant variation in growth and recovery trajectories based on the disaster type and the characteristics of the local economy. This divergence suggests that standard disaster-recovery models may need adjustment for better applicability to the Australian context. The findings offer insights into the economic resilience of different regions and provide a basis for policy recommendations aimed at improving disaster response and recovery strategies.