Natural Disasters - A Macroeconomic Perspective - A comparative study of economic and human effects caused by natural disasters in developing and developed countries

Abstract

Natural disasters happen in all parts of the world, some countries are situated in especially hazardous area being extra vulnerable. Since it is not possible to move an entire country out of the way of a coming natural disaster, consequences, often severe, are unavoidable.

This study seek to find an explanation to why rich countries are losing more money and poor countries are losing more people due to natural disasters. To illustrate the economic and human impact of natural disasters in a country, there will be discussions about four major disasters having occurred during the past decade. For the analysis, multiple regressions are used for developed and developing countries divided into two groups where independent variables will be such considered important to evaluate a country’s degree of development.

The regression results imply that the variables used for defining level of development in a country does not explain the extent of economic losses due to natural disaster, nor does it explain the number of lives lost. However, reality proves that differences in economic losses and loss of lives actually are depending on how developed a country is which is supported by the four disasters presented in the study.