Extreme weather events and economic growth: empirical evidence from Africa
Michael Insaidoo, Mark Edem Kunawotor, Godson Ahiabor
Abstract
Purpose The persistent occurrence of extreme weather events redirects both public and private resources, constrains economic expansion, employment opportunities and threatens the well-being of Africans. To provide an empirical econometric update, this study examines the unconditional effects of extreme weather events on economic growth. Also, it disaggregates weather events into floods and droughts to determine which is more consequential to economic growth. The paper further examines the distribution of economic growth at which extreme weather events may be more consequential. Design/methodology/approach The study deploys the system generalized method of moments estimation strategy, in addition to the method of moment quantile regression. Findings The results show that extreme weather event is detrimental to economic growth. Among the types of weather events, the incidence of drought has a consequential impact on economic growth while floods do not. Practical implications The gross implication of these findings is that policy makers and governments in Africa need to be proactive at least in devising robust adaptive capacities to combat extreme weather events. Also, more efforts need to be invested in understanding the adverse effects of extreme weather events on economic growth. Originality/value This study provides novel econometric evidence on the effects of extreme weather events on economic growth and disaggregates weather events into floods and droughts. In addition, the study examines the distributions of economic growth at which extreme weather events may be more consequential.