COPING WITH ECONOMIC AND ENVIRONMENTAL SHOCKS: INSTITUTIONS AND OUTCOMES: Moving to Higher Ground: Migration Response to Natural Disasters in the Early Twentieth Century

Policy and market forces delay real estate price declines on the US coast

Despite increasing risks from sea-level rise (SLR) and storms, US coastal communities continue to attract relatively high-income residents, and coastal property values continue to rise. To understand this seeming paradox and explore policy responses, we develop the Coastal Home Ownership Model (C-HOM) and analyze the long-term evolution of coastal real estate markets. C-HOM incorporates changing physical attributes of the coast, economic values of these attributes, and dynamic risks associated with storms and flooding. Resident owners, renters, and non-resident investors jointly determine coastal property values and the policy choices that influence the physical evolution of the coast. In the coupled system, we find that subsidies for coastal management, such as beach nourishment, tax advantages for high-income property owners, and stable or increasing property values outside the coastal zone all dampen the effects of SLR on coastal property values. The effects, however, are temporary and only delay precipitous declines as total inundation approaches. By removing subsidies, prices would more accurately reflect risks from SLR but also trigger more coastal gentrification, as relatively high-income owners enter the market and self-finance nourishment. Our results suggest a policy tradeoff between slowing demographic transitions in coastal communities and allowing property markets to adjust smoothly to risks from climate change.

The effect of natural disasters on human capital in the United States

Although natural disasters are commonplace, they leave in their wake an enormous amount of damage. The physical damage they cause is immediately apparent, but less obvious is the potential magnitude of disruptions to learning and resulting damage to human capital. Using the universe of Presidential Disaster Declarations in the United States, we show that natural disasters impact a region's human capital both via reductions in learning for students who remain in school as well as a reduction in the years of schooling completed. These effects appear to be scarring and persistent. Quantifying these losses using the implied reduction of lifetime earnings suggests that natural disasters reduce a region's human capital by a similar magnitude as the assessed property damage.

Did the policy responses influence credit and business cycle co-movement during the COVID-19 crisis? Evidence from Indonesia

This paper examines the responses of credit and business cycle to various policy actions of the Government of Indonesia during the COVID-19 crisis. Specifically, the paper addresses two key questions (1) How do the credit and business cycle behave during the COVID-19 crisis in Indonesia? (2) Do the central bank and government policy responses effectively stabilize the credit and business cycle? Using the concordance Index and DCC-GARCH methodology, we found that the COVID-19 crisis increased Indonesia's credit and business cycle co-movements. Similarly, using the mixed data sampling regression technique, our findings suggest fiscal policy measures and government support help the business cycle revival during the COVID-19 pandemic. However, the monetary policy transmission is weak during the pandemic.

Air pollution and migration

This paper investigates the impact of air pollution on China’s internal migration using the Migrant Population Dynamic Monitoring Survey and Air Quality Index (AQI) data in 2014. Binary response models suggest that, on average, the probability of the willingness to leave will grow by approximately 0.1 if the average value of AQI is increased by 100 points. The migration effect of sever air pollution still holds using two-stage least squares estimation. In particular, compared to inter-province and intra-city within the same province, interviewees are more willingness to leave in intra-county with the same city. Besides, individuals from the cities in central and western regions, the listed key environmental protection (KEP) cities and cities not listed as resource-based (RB) cities have stronger willingness to leave than those from the cities in eastern region, Non-KEP cities and RB cities. Our results are robust to alternative measures of air pollution and models specification.

Income Diversification and Income Inequality: Household Responses to the 2013 Floods in Pakistan

In this paper we investigate the economic response of rural households to the 2013 floods in Pakistan. The case study illustrates the important roles of labor supply adjustments and income diversification in coping with climate-related risks. Using detailed household panel data that were collected before and after the 2013 floods, we find that the exposure to flood results in lower participation in farm activities. The overall effects are decreased diversification in the sources of income and ambiguous reduction in inequality which is associated with overall declines in incomes. These changes could be locked in if affected households do not have sufficient assets to resume farming. The results suggest intervention points for public policy, related to labor mobility and access to capital.

Smog, media attention, and corporate social responsibility-empirical evidence from Chinese polluting listed companies

In recent years, the frequent occurrence of smog in Chinese cities has prompted great changes in the policy environment faced by enterprises. In this study, we address the question whether the decision-making behavior of enterprises will be affected by smog. This paper studied the 2010-2018 data of 218 listed Chinese polluting companies to investigate the impact of smog on corporate social responsibility (CSR). The subjects of this study were all listed on China's A-share market on either the Shenzhen or Shanghai Stock Exchange. The empirical results indicate the following: (1) the more serious the smog, the more likely enterprises are to perform CSR; (2) smog exerts a higher impact on the social responsibility of enterprises that receive more media attention. Further research determined that media attention, whether positive, negative, or neutral, plays the same role in moderating the relationship between smog and CSR; and (3) compared to private enterprises, the function of smog in promoting the CSR fulfillment of state-owned enterprises (SOEs) is more obvious. Based on the reality of Chinese polluting industries, this research combined smog and media attention in the exploration of CSR, which not only enriches CSR research but also provides positive guidance for the sustainable development of polluting enterprises.

How Well Do Automated Linking Methods Perform? Lessons from U.S. Historical Data

This paper reviews the literature in historical record linkage in the U.S. and examines the performance of widely-used record linking algorithms and common variations in their assumptions. We use two high-quality, hand-linked datasets and one synthetic ground truth to examine the direct effects of linking algorithms on data quality. We find that (1) no algorithm (including hand-linking) consistently produces representative samples; (2) 15 to 37 percent of links chosen by widely-used algorithms are classified as errors by trained human reviewers; and (3) false links are systematically related to baseline sample characteristics, showing that some algorithms may induce systematic measurement error into analyses. A case study shows that the combined effects of (1)-(3) attenuate estimates of the intergenerational income elasticity by up to 20 percent, and common variations in algorithm assumptions result in greater attenuation. As current practice moves to automate linking and increase link rates, these results highlight the important potential consequences of linking errors on inferences with linked data. We conclude with constructive suggestions for reducing linking errors and directions for future research.

The extensive margin and US aggregate fluctuations: A quantitative assessment

We report empirical evidence indicating that US net business formation has recently turned more volatile, procyclical and persistent. To study these stylized facts, we estimate a DSGE model with endogenous entry and exit. Business units feature heterogeneous productivity and they shut down if the present value of expected future dividends falls below the current liquidation value. The model provides a better fit than a constant exit rate model with the fluctuations of US business formation. The introduction of the extensive margin amplifies the effects of technology and risk-premium shocks, and reduces the procyclicality of firm-level production. The main sources of variability of the US aggregate fluctuations during the Great Recession are countercyclical technology shocks, persistent adverse risk-premium shocks, and expansionary monetary policy shocks.

Why climate migration is not managed retreat: Six justifications

This perspective piece makes a case for a more rigorous treatment of managed retreat as a politically, legally, and economically distinct type of relocation that is separate from climate migration. We argue that the use of both concepts interchangeably obfuscates the problems around climate-induced mobilities and contributes to the inconsistencies in policy, plans, and actions taken by governments and organizations tasked with addressing them. This call for a disentanglement is not solely an academic exercise aimed at conceptual clarity, but an effort targeted at incentivizing researchers, practitioners, journalists, and advocates working on both issues to better serve their constituencies through alliance formation, resource mobilization, and the establishment of institutional pathways to climate justice. We offer a critical understanding of the distinctions between climate migration and managed retreat grounded in six orienting propositions. They include differential: causal mechanisms, legal protections, rights regimes and funding structures, discursive effects, implications for land use, and exposure to risks. We provide empirical examples from existing literature to contextualize our propositions while calling for a transformative justice approach to addressing both issues.

Uncertainty shocks and business cycle research

We review the literature on uncertainty shocks and business cycle research. First, we motivate the study of uncertainty shocks by documenting the presence of time-variation in the volatility of macroeconomic time series. Second, we enumerate the mechanisms that researchers have postulated to link uncertainty shocks and business cycles. Third, we outline how we can specify uncertainty shocks. Fourth, we postulate a real business cycle model augmented with financial frictions and uncertainty shocks. Fifth, we use the model to illustrate our previous discussions and to show how uncertainty shocks can be expansionary, a useful finding in several contexts.

Simple Strategies for Improving Inference with Linked Data: A Case Study of the 1850-1930 IPUMS Linked Representative Historical Samples

New large-scale linked data are revolutionizing quantitative history and demography. This paper proposes two complementary strategies for improving inference with linked historical data: the use of validation variables to identify higher quality links and a simple, regression-based weighting procedure to increase the representativeness of custom research samples. We demonstrate the potential value of these strategies using the 1850-1930 Integrated Public Use Microdata Series Linked Representative Samples (IPUMS-LRS)-a high quality, publicly available linked historical dataset. We show that, while incorrect linking rates appear low in the IPUMS-LRS, researchers can reduce error rates further using validation variables. We also show how researchers can reweight linked samples to balance observed characteristics in the linked sample with those in a reference population using a simple regression-based procedure.

Are We Adapting to Floods? Evidence from Global Flooding Fatalities

There has been a growing interest in understanding whether and how people adapt to extreme weather events in a changing climate. This article presents one of the first empirical analyses of adaptation to flooding on a global scale. Using a sample of 97 countries between 1985 and 2010, we investigate the extent and pattern of flood adaptation by estimating the effects of a country's climatological risk, recent flood experiences, and socioeconomic characteristics on its flood-related fatalities. Our results provide mixed evidence on adaptation: countries facing greater long-term climatological flooding risks do not necessarily adapt better and suffer fewer fatalities; however, after controlling for the cross-country heterogeneity, we find that more recent flooding shocks have a significant and negative effect on fatalities from subsequent floods. These findings may suggest the short-term learning dynamics of adaptation and potential inefficacy of earlier flood control measures, particularly those that promote increased exposure in floodplains. Our findings provide important implications for climate adaptation policy making and climate modeling.

Climate change and residential electricity consumption in the Yangtze River Delta, China

Estimating the impact of climate change on energy use across the globe is essential for analysis of both mitigation and adaptation policies. Yet existing empirical estimates are concentrated in Western countries, especially the United States. We use daily data on household electricity consumption to estimate how electricity consumption would change in Shanghai in the context of climate change. For colder days <7 °C, a 1 °C increase in daily temperature reduces electricity consumption by 2.8%. On warm days >25 °C, a 1 °C increase in daily temperatures leads to a 14.5% increase in electricity consumption. As income increases, households' weather sensitivity remains the same for hotter days in the summer but increases during the winter. We use this estimated behavior in conjunction with a collection of downscaled global climate models (GCMs) to construct a relationship between future annual global mean surface temperature (GMST) changes and annual residential electricity consumption. We find that annual electricity consumption increases by 9.2% per +1 °C in annual GMST. In comparison, annual peak electricity use increases by as much as 36.1% per +1 °C in annual GMST. Although most accurate for Shanghai, our findings could be most credibly extended to the urban areas in the Yangtze River Delta, covering roughly one-fifth of China's urban population and one-fourth of the gross domestic product.

Potentially Extreme Population Displacement and Concentration in the Tropics Under Non-Extreme Warming

Evidence increasingly suggests that as climate warms, some plant, animal, and human populations may move to preserve their environmental temperature. The distances they must travel to do this depends on how much cooler nearby surfaces temperatures are. Because large-scale atmospheric dynamics constrain surface temperatures to be nearly uniform near the equator, these displacements can grow to extreme distances in the tropics, even under relatively mild warming scenarios. Here we show that in order to preserve their annual mean temperatures, tropical populations would have to travel distances greater than 1000 km over less than a century if global mean temperature rises by 2 °C over the same period. The disproportionately rapid evacuation of the tropics under such a scenario would cause migrants to concentrate in tropical margins and the subtropics, where population densities would increase 300% or more. These results may have critical consequences for ecosystem and human wellbeing in tropical contexts where alternatives to geographic displacement are limited.

Flood Risk, Flood Mitigation, and Location Choice: Evaluating the National Flood Insurance Program's Community Rating System

Climate change is expected to worsen the negative effects of natural disasters like floods. The negative impacts, however, can be mitigated by individuals' adjustments through migration and relocation behaviors. Previous literature has identified flood risk as one significant driver in relocation decisions, but no prior study examines the effect of the National Flood Insurance Program's voluntary program-the Community Rating System (CRS)-on residential location choice. This article fills this gap and tests the hypothesis that flood risk and the CRS-creditable flood control activities affect residential location choices. We employ a two-stage sorting model to empirically estimate the effects. In the first stage, individuals' risk perception and preference heterogeneity for the CRS activities are considered, while mean effects of flood risk and the CRS activities are estimated in the second stage. We then estimate heterogeneous marginal willingness to pay (WTP) for the CRS activities by category. Results show that age, ethnicity and race, educational attainment, and prior exposure to risk explain risk perception. We find significant values for the CRS-creditable mitigation activities, which provides empirical evidence for the benefits associated with the program. The marginal WTP for an additional credit point earned for public information activities, including hazard disclosure, is found to be the highest. Results also suggest that water amenities dominate flood risk. Thus, high amenity values may increase exposure to flood risk, and flood mitigation projects should be strategized in coastal regions accordingly.

Exploring the Climate Change, Migration and Conflict Nexus

The potential link between climate change, migration, and conflict has been widely discussed and is increasingly viewed by policy makers as a security issue. However, considerable uncertainty remains regarding the role that climate variability and change play among the many drivers of migration and conflict. The overall objective of this paper is to explore the potential pathways linking climate change, migration and increased risk of conflict. We review the existing literature surrounding this issue and break the problem into two components: the links between climate change and migration, and those between migration and conflict. We found a large range of views regarding the importance of climate change as a driver for increasing rates of migration and subsequently of conflict. We argue that future research should focus not only on the climate-migration-conflict pathway but also work to understand the other pathways by which climate variability and change might exacerbate conflict. We conclude by proposing five questions to help guide future research on the link between climate change, migration, and conflict.

Migration in the 1930s: Beyond the Dust Bowl

This paper analyzes in detail the role of environmental and economic shocks in the migration of the 1930s. The 1940 U.S. Census of Population asked every inhabitant where they lived five years earlier, a unique source for understanding migration flows and networks. Earlier research documented migrant origins and destinations, but we will show how short term and annual weather conditions at sending locations in the 1930s explain those flows, and how they operated through agricultural success. Beyond demographic data, we use data about temperature and precipitation, plus data about agricultural production from the agricultural census. The widely known migration literature for the 1930s describes an era of relatively low migration, with much of the migration that did occur outward from the Dust Bowl region and the cotton South. Our work about the complete U.S. will provide a fuller examination of migration in this socially and economically important era.