Publications

 Journal Articles 

"Silver lining of the water: The role of government relief assistance in disaster recovery" European Journal of Political Economy, 79, 1-24, 2023. [with Akbulut-Yuksel, M., & Ulubaşoğlu, M. A.]

Combining three datasets, the Australian Longitudinal Census Panel of 2006 and 2011, engineering data on flood-water height, and administrative data on government relief assistance, we investigate whether and how the government’s post-disaster relief payments helped the economic recovery from riverine floods that struck the state of Queensland in Australia in 2010/11. Using a difference-in-differences methodology that compares the flooded areas with unflooded zones within Queensland whereby the flooded zones differed in their levels of flooding and the government’s relief assistance, we find that the government’s disaster relief assistance was effective in economic recovery, having led individuals residing in flooded areas with average flood height to experience a 3.4 percent rise in (self-reported) income following the disaster, relative to those individuals living in unflooded areas of the state. Our findings are robust to a battery of sensitivity tests, including migration, parallel trends, spatial spillovers, and possible confounders.

"Does credit availability mitigate domestic conflict?" Economic Modelling, 119, 106105, 2023. [with Bhattacharya, P. S. & Chowdhury, P. R.]

This paper establishes that lack of credit is one of the root causes of conflict; with credit being scarce, productive endeavours are less attractive and conflict-led activities more appealing at the margin. Our investigation contributes to the literature which predominantly focused on the role of income and income inequality for conflict incidence, but not credit availability in particular. A theoretical framework is developed with endogenous occupation choices, demonstrating that more credit mitigates conflict, especially for developing countries. The empirical analysis uses novel instruments focusing on heterogeneous land reform implementations and their cumulative impact. Using data from 143 countries over the period 1960–2010, there is robust evidence that the conflict incidence is decreasing in credit availability, especially for the pro-poor land reforms and land reforms subsuming land ceiling, expropriation and redistributive type motives. Thus, policies focusing on ease of credit will be beneficial in mitigating civil strife, particularly for developing countries.

“Storm autocracies”: Islands as natural experiments. Journal of Development Economics, 159, 102982, 2022. [with Anbarci, N., & Ulubaşoğlu, M. A.]

We exploit the exogenous variation in the timing and intensity of storms in island countries to estimate the storms' effect on the extent of democracy. Using a rich panel dataset spanning the period 1950–2020, our difference-in-differences estimations, which allow multiple treatments over time, indicate that storms trigger autocratic tendencies in island countries by reducing the Polity2 score by about four percent in the following year. These findings resonate with our simple dynamic game-theoretical model, which predicts that governments move towards autocracy by placating citizens with post-disaster assistance in response to citizens’ insurgency threat in the absence of relief, giving rise to the political regime of “storm autocracies”. Our results survive a battery of robustness analyses, randomization tests, potential spatial biases, and other falsification and placebo checks.

"Evaluating wildfire exposure: Using wellbeing data to estimate and value the impacts of wildfire" Journal of Economic Behavior & Organization, 192, 782-798, 2021. [with Johnston, D. W., Önder, Y. K., & Ulubaşoğlu, M. A.]

This paper estimates the wellbeing effects of the 2009 Black Saturday Bushfires, the deadliest wildfire event in Australia’s known history. Using subjective wellbeing data from a nationally representative longitudinal study and adopting an individual fixed-effects approach, our results identify a significant reduction in life satisfaction for individuals residing in close proximity of the wildfires. The negative wellbeing effect is valued at A$52,300. This corresponds to 80% of the average annual income of a full-time employed adult in the state of Victoria. The satisfaction domain most negatively affected is how safe the person feels, and the group most affected are people with low social support. A delayed adverse mental health effect is also identified.

"Long‐term effects of malnutrition on early‐life famine survivors and their offspring: New evidence from the Great Vietnam Famine 1944–45" Health Economics, 30(7), 1600-1627, 2021. [with Guven, C., Hoang, T., & Ulubaşoğlu, M. A.]

We investigate the long-term effects of the 1944–45 Great Vietnam Famine on early-life survivors and their offspring using census data, household survey data and historical administrative data. Unlike previous famine studies, we measure famine severity using a unique, more direct, and “plausibly exogenous” metric of food availability: province-level excess paddy (rice) production per capita in 1944. Our study makes two novel contributions. First, we overcome several selection problems associated with the estimation of true famine effects, given the short duration and spatial variation of the Vietnamese famine. Second, we investigate the intergenerational effects of famine, focusing specifically on the occupation of the survivors' parents and the school participation of the survivors' offspring. Our preferred specification estimates generalized triple differences that allow us to control for birth-year and birth-province fixed effects and nation-wide shocks. Our findings suggest that the Vietnamese famine reduced literacy by around 3 percent, BMI by 5.6%–8.4%, arm-length by 4.5%–6.7% (1.1–1.7 cm), height by 2.2%–3.2% (3.4–5 cm), and weight by 10%–14% (4.7–6.9 kg) among the affected cohort. These detrimental famine effects also extended to economic welfare, in the form of lower household incomes and lower non-food household expenditures in adulthood. We also document a 4.9%–7.2% reduction in school participation among survivors' offspring, which has major implications for the exogenous origins of social mobility, inequality, and poverty.

"Weathering Trust" Journal of Economic Behavior & Organization 178: 449-473,  2020. [with Lee G. H., Shabnam N., & Jayasinghe S.]

We show that interpersonal trusting behavior that forms in the very long run is subject to change in the short run after natural disasters. By matching our novel spatially disaggregated water height–based flood severity data on the 1998 flood in Bangladesh with individual-level longitudinal World Values Survey data, we find that individuals experiencing floods reduce their interpersonal trust by at least 8.12 percent. On causal mechanisms, we find that individuals who lack access to credit following a flood shock are more likely to lessen their level of trust in others. Our findings also indicate that post-disaster relief crowds out the adverse effects of floods on trust. Our results are robust to a wide array of randomization tests, restrictive specifications, omitted variable biases, falsification and placebo tests, and external validity checks to the extent possible. Our findings highlight the importance of access to financial resources for stabilizing interpersonal trusting behavior in societies.

"Healthy air, healthy mom: Experimental evidence from Chinese power plants" Energy Economics, 91: 1-14, 2020. [with Shuddhasattwa R.]

We examine the effect of air pollution clean-up measures on reducing pregnancy risks in China. Using policy-driven variations across provinces and over time, we undertake a natural experiment that examines the effect of mandated Flue Gas Desulfurization (FGD) installation in Chinese power plants. Matching our novel measure of FGD intensity with province-level administrative data spanning the period 2002–2011, our estimates indicate that desulfurizing a power plant with a capacity of 10,000 MW decreases high-risk pregnancy for at least 177 mothers in every 10,000 cases. On the potential mechanism, we find that this desulfurization intervention decreases both prenatal and postnatal medical examinations because there is a decrease in the incidence of gynecological diseases. Our results are robust to a wide array of randomization tests, restrictive specifications, omitted variable biases, and to falsification and placebo tests. From a policy perspective, we estimate that the adoption of FGD in China saves approximately 83,405 mothers from high-risk pregnancy in a five-year period.

"Floods, Bushfires and Sectoral Economic Output in Australia, 1978–2014" Economic Record 95(308): 58-80,  2019. [with M Ulubaşoğlu, Y.K. Önder,  Y. Chen, and A. Rajabifard]

Using state‐level annual variation in natural disasters and economic output in Australia, we estimate the direct effects of floods and bushfires on sectoral gross value added during the period 1978–2014. We find that floods exert an adverse and persistent effect on the outputs of agriculture, mining, construction and financial services sectors. For example, our estimates indicate that a state that experienced a flood in a given year encountered, on average, 5–6 per cent lower agricultural output in both that year and the following year, compared to another state with no such flood experience. Sectoral responses to bushfires are more nuanced.

"Earthquakes Don't Kill, Built Environment Does: Evidence from a Cross-Country Analysis" Economic Modelling, 70(3): 458-468, 2018. 

Earthquakes are often attributed to a myriad of human casualties, but its variation is quite remarkable across countries. This paper first presents a simple theoretic analysis to understand why earthquake casualties vary across countries. After that, using a rich panel dataset of countries observed over half a century, from 1950 to 2009, this paper provides empirical evidence that the middle-income countries are more susceptible to earthquake casualties because of its higher level of vulnerable buildings relative to the low- and high-income countries. This finding retains its robustness when I use different income-based criteria of defining country classification, controlling for earthquake probabilities, capturing institutional effects, and devising alternative specifications, among others. The results suggest that the governments can significantly reduce earthquake casualties by emphasising on the quality—rather than quantity—of built environment through enforcing quake-resistant regulations. Non-technical Audioslide Presentation

"Can Extreme Rainfall Trigger Democratic Change? The Role of Flood-Induced Corruption" Public Choice 171(3):  331-358, 2017. [with N. Anbarci, P. Bhattacharya, and M. Ulubaşoğlu]

Using a new data set of extreme rainfall covering 130 countries from 1979 to 2009, this paper investigates the effect of extreme rainfall-driven floods on democratic conditions. Our key finding is that extreme rainfall-led floods exert two opposing effects on the level of democracy. On one hand, floods trigger corruption in the distribution of relief and other post-disaster assistance, which in turn activates a reaction from the citizenry demanding an improved democracy. On the other hand, floods induce an autocratic tendency in the incumbent regime because an efficient post-disaster management without dissent, chaos or plunder following the disaster, requires a repressive reaction from the governing authority. The net estimated effect is an improvement in democratic conditions.

"The Shocking Origins of Political Transitions: Earthquakes" Southern Economic Journal 83(3):  796-823, 2017. [with N. Anbarci, P. Bhattacharya, and M. Ulubaşoğlu]

Do earthquakes trigger political transitions? Using a rich panel dataset of 160 countries observed over 1950 to 2007, we find that earthquake shocks, measured in terms of the effect of ground-motion amplitude on death toll, have two contradicting effects on political change. On the one hand, earthquakes drive transitions into democracy due to an affective shock, which we interpret to be the reaction of voters to earthquakes by which they hold the incumbent government responsible for earthquake damages. On the other hand, earthquakes indirectly hasten transitions into a less democratic regime because they increase the income level contemporaneously, possibly due to short-term emergency response and recovery expenditures, and thus, making it costlier to contest the incumbent government. Overall, we show that, while not leading to a full-fledged regime transition, earthquake shocks open a new democratic window of opportunity, but this window is narrowed by improved economic conditions.

"The Role of Middle-class in Economic Development: What Do Cross-country Data Show?" Review of Development Economics 21(2):  404-424, 2017. [with N. Chun, R. Hasan, and M. Ulubaşoğlu]

This paper investigates the channels through which the middle class may matter for consumption growth. Using several different middle-class measures and a panel of 105 developing countries spanning the period 1985–2013, we find that a larger middle class influences consumption growth primarily through higher levels of human capital accumulation. There is also a significant direct effect of middle-class size on consumption growth, which is more pronounced in the latter half of the sample, the 2000–2013 period.

"Role of Middle Class in Democratic Diffusion." International Review of Economics and Finance 42(3): 536-548, 2016. [with N. Chun, R. Hasan, and M. Ulubaşoğlu]

The modernization hypothesis and the democratic domino theory have been at the forefront in explaining the democratization around the globe. This paper empirically investigates the ‘middle class-driven modernization’ hypothesis and the ‘middle class-driven democratic domino’ effect in a panel of 145 countries over the period 1985 to 2013. Using several middle class measures and a dynamic panel estimator, we show that the ‘middle class-driven modernization’ hypothesis finds strong empirical support in the sample of developing countries excluding Eastern Europe and Central Asia, while the ‘middle class-driven democratic domino’ effect finds support in the sample of developing countries excluding East Asia and the Pacific.

 Refereed Books/Entries 

 Professional/Technical Reports