The short-term economic impact of tropical Cyclone Pam: an analysis using VIIRS nightlight satellite imagery

Cyclones are relatively instantaneous shocks where arguably most of the important consequences take place in the first few weeks or months. In this article, we construct destruction proxies of wind exposure and storm surge damages and use satellite measures of nightlight intensity to investigate the short-term impact of tropical cyclones using the case study of Cyclone Pam, which struck the South Pacific Islands in March 2015. Using the unaffected islands as a control group, our regression analysis reveals that initially the storm reduced economic activity in the affected islands by as much as 111%, but by the seventh month there were positive boosts to nightlight intensity. By the ninth month this resulted in cumulative net increases in activities related to night-time electricity usage. More generally, our results suggest that there is likely considerable temporal heterogeneity in the response of areas affected by tropical cyclones and demonstrates the potential of using nightlight imagery to assess the short-term economic impact of tropical storms, and possibly other extreme event phenomena, in a relatively timely manner.