Beneath the Clouds: A Microdata Approach to Understanding Storm Impacts in India
Extreme weather events, like tropical storms, pose significant threats to economies by damaging infrastructure and disrupting human capital development. This study examines the economic impacts of storms in India using microdata. We leverage estimates of storm impact on physical assets and educational attainment from the economic literature to compute a back-of-the-envelope approximation of the financial impact of storms. Using wind, firm, and demographic information, we estimate that, in 2021, damage to fixed assets reached USD2.8 billion and losses in sales in manufacturing totaled USD14.5 billion. On the other hand, the reduction in lifetime earnings due to lower educational attainment amounted to approximately USD25.0 billion. These findings highlight the importance of targeted resilience policies to mitigate the economic risks of extreme weather events.