December 13, 2010

Normalizing Economic Loss from Natural Disasters: a Global Analysis

by Eric Neumayer and Fabian Barthel

- In this article, we argue that the conventional methodology for normalizing economic loss is problematic since it normalizes for changes in wealth over time, but fails to normalize for differences in wealth across space at any given point of time. We introduce an alternative methodology that overcomes this problem in theory, but faces many more problems in its empirical application. Applying, therefore, both methods to the most comprehensive existing global dataset of natural disaster loss, in general we find no significant upward trends in normalized disaster damage over the period 1980 to 2009 globally, regionally, for specific disasters or for specific disasters in specific regions.

Neumayer, E. and F. Barthel (2010). "Normalizing Economic Loss from Natural Disasters: a Global Analysis." Grantham Research Institute on Climate Change and the Environment Working Paper No. 31, Nov 2010.