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The approach uses EM-DAT physical climate risk data, addresses underreported economic losses by building an exogenous shock proxy via a non-linear damage model, and quantifies macroeconomic effects with a non-linear dynamic spatial panel model. It incorporates interregional linkages and insurance payouts from the Spanish Consorcio de Compensación de Seguros to capture recovery dynamics, finding strong non-linearities and location-dependent outcomes.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/assessing-the-economic-impact-of-extreme-climate-events-evidence-from-the-valencia-floods/289446/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/assessing-the-economic-impact-of-extreme-climate-events-evidence-from-the-valencia-floods/289446.png","ImageObject",300,407,{"name":92,"@type":93},"Riley West","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-19","2026-09-17",true,{"@type":102,"interactionType":103,"userInteractionCount":44},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What analytical framework does the study propose for assessing climate disaster impacts?","Question",{"text":112,"@type":113},"It proposes a unified framework to assess economic consequences and to enable forward-looking scenarios for risk management and policy planning.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"How does the study construct economic damages when EM-DAT lacks complete damage information?",{"text":117,"@type":113},"It uses a global flood damage model to impute missing economic damages and builds a proxy for economically exogenous shocks via a non-linear damage model.",{"name":119,"@type":110,"acceptedAnswer":120},"What model and variables are used to evaluate macroeconomic consequences for employment?",{"text":121,"@type":113},"The study develops a non-linear dynamic spatial panel model that captures direct and indirect flood effects on regional employment, including interregional economic linkages and insurance payouts as a recovery proxy.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},289446,1789635344,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":44,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":139,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":129,"read_time":144,"preview_page_count":4},1099523885074,"https://ap-avatar.wpscdn.com/davatar_9964176cb1d06d4a9deccf72a44ae3dc","Assessing the Economic Impact of Extreme Climate Events:  \nEvidence from the Valencia Floods  \nJ. M. Barrutiabengoa, A. García and C.A. Ulloa  \nMay, 2025  \nAssessing the Economic Impact of Extreme Climate Events 2  \nMain takeaways  \n▰ We propose a common analytical framework to assess the economic consequences of increasingly frequent climate-related disasters. This framework also facilitates the design of forward-looking scenarios, which are becoming essential inputs for risk management and policy planning.  \n▰ We use the EM-DAT database on physical climate risks as our primary data source. Recognizing its limitations-particularly the underreporting of economic damages-we enrich the core damage variable with additional sources to construct a proxy for economically exogenous shocks , estimated via a non-linear damage model. Crucially, this approach is both flexible and scalable: the methodology can be extended to other types of natural disasters and geographical contexts, particularly where economic loss data are incomplete.  \n▰ To assess the macroeconomic consequences of  \nclimate-related events, we develop a non-linear dynamic spatial panel model that captures both the direct and indirect effects of floods on regional employment. The model explicitly incorporates interregional economic linkages and leverages our previous estimated damage variable as the primary shock proxy. To account for post-disaster recovery dynamics , we also include insurance payouts from the Spanish Consorcio de Compensación de Seguros as a proxy for financial assistance.  \n▰ Our findings reveal strong non-linearities: the effect of the shock becomes particularly relevant in the case of extreme events , and the geographic location of the catastrophe plays a crucial role in determining its impact on national outcomes.  \n▰ In the the absence of official damage data, our models suggested that the DANA could have caused economic damages losses between 0.55 % and 1.71 % of Spain’s GDP, potentially reducing employment by an average of 2.2 percentage points in the province of Valencia and by 0.2 percentage points at the national level. Following the release of damage data in EM-DAT, the estimated employment cumulative impact for Valencia was revised downward to 1.4 percentage points, closely aligning with the observed outcome (-1 .6pp) .  \n▰ Importantly, the pace of employment recovery has exceeded initial expectations , primarily due to the timely and significant disbursement of insurance payouts. We find that when such payouts exceed 40% of the estimated damages, they appear to mitigate the adverse effects on growth and contribute to a net positive impact on employment outcomes. The recovery of the capital stock might follow a different temporal pattern, which falls beyond the scope of this study.  \n▰ Our results prove robust across specifications: consistent estimates are obtained both when the damage proxy is replaced with a physical metric (such as precipitations) and when modifying the spatial weight matrices used to capture interregional economic dependencies.  \nAssessing the Economic Impact of Extreme Climate Events 3  \nEM-DAT serves as the gold standard for data on acute climate events. It is a reliable source, though some gaps remain  \nWORLD CLIMATE-RELATED ACUTE EVENTS  \n1980-2025. NUMBER OF EVENTS.  \nSource: BBVA Research from EM-DAT.  \nWORLD CLIMATE-RELATED ACUTE EVENTS WITH DAMAGE INFORMATION. 1980-2025. NUMBER OF EVENTS  \nSource: BBVA Research from EM-DAT.  \n▰ The EM-DAT database provides a record of the most significant climate-related physical events worldwide(*) . In addition to the location and dates of each event, it includes information on fatalities, affected populations, and economic damages(**) caused by the event.  \n▰ The availability of data varies significantly across variables. Between 1980 and 2025, only 36% of acute physical risk events include information on economic damages (4,376 out of 12,179) . For floods, the coverage drops","cbCaitIyGiHdPWMY","https://ap.wps.com/l/cbCaitIyGiHdPWMY","pdf",2433890,22,"English","# Main takeaways\n# EM-DAT and data coverage for economic damages\n# Imputing economic damages using a global flood damage model","[{\"question\":\"What analytical framework does the study propose for assessing climate disaster impacts?\",\"answer\":\"It proposes a unified framework to assess economic consequences and to enable forward-looking scenarios for risk management and policy planning.\"},{\"question\":\"How does the study construct economic damages when EM-DAT lacks complete damage information?\",\"answer\":\"It uses a global flood damage model to impute missing economic damages and builds a proxy for economically exogenous shocks via a non-linear damage model.\"},{\"question\":\"What model and variables are used to evaluate macroeconomic consequences for employment?\",\"answer\":\"The study develops a non-linear dynamic spatial panel model that captures direct and indirect flood effects on regional employment, including interregional economic linkages and insurance payouts as a recovery proxy.\"}]","Assessing the Economic Impact of Extreme Climate Events: Evidence from the Valencia Floods | PDF",55]