The impact on economic activity and housing market of the 2023 Emilia-Romagna floods

Elena Gentili ()
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Elena Gentili: Bank of Italy

No 1506, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: In May 2023, two floods hit the Italian region of Emilia-Romagna, causing 17 deaths and €10 billion in damages. This paper investigates the impact of such floods on economic activity and household wealth. Using nightlight data to measure economic activity and considering a triple difference-in-differences empirical framework, we find a decline in nightlight activity in flooded municipalities in the three weeks surrounding the two floods, a rebound effect in the following three weeks, but no effect thereafter. In the most pessimistic scenario, the total reduction in regional GDP growth in 2023 is between 0.1 and 0.2 per cent, i.e. between €3 and 5 million, excluding the agricultural sector. The duration of the impact of the floods is broadly confirmed by the other two proxies for economic activity available at the daily frequence and municipal level, i.e. hiring and road traffic data. We also find temporary effects on the housing market demand, but no effects on the house prices asked by the sellers nor on the number of posted advertisements for house sales, suggesting that the housing market in flooded municipalities already discounts the risk of such natural events.

Keywords: flood; nightlight; housing market; triple difference-in-differences; Emilia-Romagna (search for similar items in EconPapers)
JEL-codes: C18 O18 O44 Q54 R11 R12 R21 R31 (search for similar items in EconPapers)
Date: 2025-11
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