The price impact of extreme weather in developing countries

Andreas Heinen, Jeetendra Khadan, Eric Strobl

Research output: Contribution to journalArticlepeer-review

8 Citations (Scopus)
514 Downloads (Pure)


We examine the impact of extreme weather on consumer prices in developing countries by constructing a monthly data set of potential hurricane and flood destruction indices and linking these with consumer price data for 15 Caribbean islands. Our econometric model shows that the price impact of extreme weather events can be large. To illustrate potential welfare losses due to these price effects, we combine our estimates with price elasticities obtained from a demand system and with event probabilities for Jamaica. Our results show that while expected monthly losses are small, rare events can cause large falls in monthly welfare due to price increases.
Original languageEnglish
Pages (from-to)1327–1342
Number of pages16
JournalThe Economic Journal
Issue number619
Early online date22 May 2018
Publication statusPublished - Apr 2019


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