Human-made disasters and economic impact for a developing economy: evidence from Brazil

Thais Waideman Niquito (), Fernando Pozzobon (), Vinícius Halmenschlager () and Felipe Ribeiro
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Thais Waideman Niquito: Santa Catarina State University
Fernando Pozzobon: Santa Catarina State University
Vinícius Halmenschlager: Federal University of Rio Grande do Sul

Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, 2021, vol. 109, issue 3, No 14, 2313-2341

Abstract: Abstract This article analyzes the short-term economic impacts of the collapse of the ‘Fundão’ mining tailings dam, located in the Brazilian state of Minas Gerais. This event is known as the ‘Mariana Tragedy.’ It affected several municipalities in the states of Minas Gerais and Espírito Santo and can be classified as a human-made disaster. We investigate the effects on production, examining the sectors of economic activity (agriculture, industry, and services). The research design consisted of the estimation of spatial-difference-in-differences models. The results showed a negative direct effect on the total GDP ( − 6.81%), on the gross value added of agriculture ( − 12.12%), and industry ( − 15.57%). Regarding indirect effects, the positive impact on the total GDP (+ 2.69%) was a robust effect observed. No effects of the disaster were found on the service sector. The research findings contribute to the discussion on how human-made disasters affect developing economies and may provide support to build public policies for disaster prevention, mitigation, and remediation.

Keywords: Technological disasters; Spatial-difference-in-differences model; Production (search for similar items in EconPapers)
JEL-codes: O18 R11 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s11069-021-04921-4

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