Empirical Economics

, Volume 56, Issue 5, pp 1647–1681 | Cite as

Macroeconomic impacts of the 2010 earthquake in Haiti

  • Rohan BestEmail author
  • Paul J. Burke


In this paper, we use the synthetic control method to estimate the macroeconomic losses from the 2010 earthquake in Haiti, one of the most severe natural disasters in the modern era. The macroeconomic effects of the earthquake were equal to an average loss of up to 12% of gross domestic product over the period 2010–2015. While surges in imports and foreign aid supported a temporary increase in aggregate consumption, aggregate investment and services sector output experienced large contractions. The road transport sector was severely affected. Impacts on electricity use have been less pronounced. The data suggest that macroeconomic losses may be permanent. The earthquake is thus a case of an extreme natural disaster contributing to divergence in development outcomes.


Macroeconomic impact Haiti Earthquake Synthetic control method 

JEL Classification

E21 E22 E23 O11 O54 



We are grateful for comments from Terence Wood, David Stern, Yusaku Horiuchi, Sadia Afrin, Ryan Edwards, Huy Nguyen, anonymous referees, and participants in the Arndt-Corden Department of Economics Seminars. This research was also supported by an Australian Government Research Training Program (RTP) Scholarship.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

Data and computer code availability

The datasets of this paper (1. data, 2. code including instructions) are collected in the electronic supplementary material of this article.

Supplementary material (3.1 mb)
Supplementary material 1 (zip 3202 KB)


  1. Abadie A, Gardeazabal J (2003) The economic costs of conflict: a case study of the Basque Country. Am Econ Rev 93(1):112–32CrossRefGoogle Scholar
  2. Abadie A, Diamond A, Hainmueller J (2010) Synthetic control methods for comparative case studies: estimating the effect of California’s tobacco control program. J Am Stat Assoc 105(490):493–505CrossRefGoogle Scholar
  3. Abadie A, Diamond A, Hainmueller J (2015) Comparative politics and the synthetic control method. Am J Polit Sci 59(2):495–510CrossRefGoogle Scholar
  4. Barone G, Mocetti S (2014) Natural disasters, growth and institutions: a tale of two earthquakes. J Urban Econ 84:52–66CrossRefGoogle Scholar
  5. Barro R (2009) Rare disasters, asset prices, and welfare costs. Am Econ Rev 99(1):243–64CrossRefGoogle Scholar
  6. BBC (2016) Hurricane Matthew: Haiti South ‘90% destroyed’. Accessed 17 Oct 2016
  7. Becerra O, Cavallo E, Noy I (2014) Foreign aid in the aftermath of large natural disasters. Rev Dev Econ 18(3):445–60CrossRefGoogle Scholar
  8. Ben-David D, Lumsdaine RL, Papell DH (2003) Unit roots, postwar slowdowns and long-run growth: evidence from two structural breaks. Empir Econ 28:303–319CrossRefGoogle Scholar
  9. Burke P, Leigh A (2010) Do output contractions trigger democratic change? Am Econ J Macroecon 2:124–57CrossRefGoogle Scholar
  10. Cavallo E, Powell A, Becerra O (2010) Estimating the direct economic damages of the earthquake in Haiti. Econ J 120:F298–F312CrossRefGoogle Scholar
  11. Cavallo E, Galiani S, Noy I, Pantano J (2013) Catastrophic natural disasters and economic growth. Rev Econ Stat 95(5):1549–61CrossRefGoogle Scholar
  12. CIA (2016) United States Central Intelligence Agency. The World Factbook. Accessed 29 Oct 2016
  13. Darné O (2009) The uncertain unit root in real GNP: a re-examination. J Macroecon 31:153–166CrossRefGoogle Scholar
  14. Dell M, Jones B, Olken B (2012) Temperature shock and economic growth: evidence from the last half century. Am Econ J Macroecon 4(3):66–95CrossRefGoogle Scholar
  15. duPont W, Noy I (2015) What happened to Kobe? A reassessment of the impact of the 1995 earthquake in Japan. Econ Dev Cult Change 63(4):777–812CrossRefGoogle Scholar
  16. Échevin D (2011) Vulnerability and livelihoods before and after the Haiti earthquake. World Bank Policy Research Working Paper 5850. Latin America and the Caribbean Region, Social Protection Sector, Oct 2011Google Scholar
  17. EM-DAT (2015) D. Guha-Sapir, R. Below, Ph. Hoyois—EM-DAT: International Disaster Database, Université Catholique de Louvain, Brussels, Belgium.
  18. Government of the Republic of Haiti (2010) Haiti earthquake PDNA: assessment of damage, losses, general and sectoral needs. Annex to the action plan for national recovery and development of HaitiGoogle Scholar
  19. Haiti Reconstruction Fund (2016) Productive infrastructure program (development of the industrial park of Caracol). Final Document, Document of the Inter-American Development Bank, Productive Infrastructure Program III (HA-L1091/HA-X1036). Accessed 5 Oct 2016
  20. Hallegatte S (2014) Natural disasters and climate change: an economic perspective. Springer, ChamCrossRefGoogle Scholar
  21. Hallegatte S, Dumas P (2009) Can natural disasters have positive consequences? Investigating the role of embodied technical change. Ecol Econ 68:777–786CrossRefGoogle Scholar
  22. Hallegatte S, Hourcade J, Dumas P (2007) Why economic dynamics matter in assessing climate change damages: illustration on extreme events. Ecol Econ 62(2):330–340CrossRefGoogle Scholar
  23. Henderson J, Storeygard A, Weil D (2012) Measuring economic growth from outer space. Am Econ Rev 102(2):994–1028CrossRefGoogle Scholar
  24. Hochrainer-Stigler S (2015) Natural disasters and macroeconomic performance: an empirical analysis based on an econometric modelling approach. J Integr Disaster Risk Manag 5(1):21–41Google Scholar
  25. Horiuchi Y, Mayerson A (2015) The opportunity cost of conflict: statistically comparing Israel and synthetic Israel. Political Science and Research Methods, 1–10 MayGoogle Scholar
  26. IDB (2014) Inter-American Development Bank. Private Sector Assessment of Haiti, Washington DC, Oct 2014Google Scholar
  27. IEA (2016) 2004–2014 IEA world energy statistics and balances. International Energy Agency, Paris. Accessed 24 Sept 2016Google Scholar
  28. IMF (2009) International Monetary Fund. Enhanced initiative for heavily indebted poor countries, Haiti. Completion point document, IMF Country Report No. 09/288, Sept 2009Google Scholar
  29. IMF (2015) International Monetary Fund. Haiti ex post assessment of longer-term program engagement. IMF Country Report No. 15/4, Jan 2015Google Scholar
  30. IMF (2016) World economic outlook database Oct 2016, 2004–2014. International Monetary Fund. Accessed 15 Oct 2016
  31. Katz J (2013) The big truck that went by: how the world came to save Haiti and left behind a disaster. St. Martin’s Press, New YorkGoogle Scholar
  32. Lantagne D, Nair G, Lanata C, Cravioto A (2013) The cholera outbreak in Haiti: where and how did it begin? Curr Top Microbiol Immunol.
  33. Loayza N, Olaberria E, Rigolini J, Christiaensen L (2012) Natural disasters and growth: going beyond the averages. World Dev 40(7):1317–36CrossRefGoogle Scholar
  34. Marshall M, Cole B (2014) Global report 2014. Conflict, governance, and state fragility, Center for Systemic Peace Vienna, VA, USAGoogle Scholar
  35. Miami Herald (2015) Tens of thousands still living in tents 5 years after Haiti earthquake. Accessed 6 Oct 2016
  36. Munasib A, Rickman D (2015) Regional economic impacts of the shale gas and tight oil boom: a synthetic control analysis. Reg Sci Urban Econ 50:1–17CrossRefGoogle Scholar
  37. Nelson CR, Plosser CI (1982) Trends and random walks in macroeconomic time series. J Monet Econ 10:139–162CrossRefGoogle Scholar
  38. Noy I (2009) The macroeconomic consequences of disasters. J Dev Econ 88:221–31CrossRefGoogle Scholar
  39. OECD (2015) International development statistics (IDS) online databases, 1998–2013. The Organisation for Economic Co-operation and Development. Accessed 10 Aug 2015Google Scholar
  40. Okuyama Y (2003) Economics of natural disasters: a critical review. Regional Research Institute Research Paper 2003–12. West Virginia University, Morgantown, WVGoogle Scholar
  41. Posso A (2015) Remittances and financial institutions: is there a casual linkage? BE J Macroecon 15(2):769–789Google Scholar
  42. Rajan R, Subramanian A (2011) Aid, dutch disease, and manufacturing growth. J Dev Econ 94:106–118CrossRefGoogle Scholar
  43. Ramachandran V, Walz J (2012) Haiti: where has all the money gone? Center for Global Development Policy Paper 004, May 2012, Washington DCGoogle Scholar
  44. Romer PM (1986) Increasing returns and long-run growth. J Polit Econ 94(5):1002–1037CrossRefGoogle Scholar
  45. Ruiz I, Vargas-Silva C (2012) Exploring the causes of the slowdown in remittances to Mexico. Empir Econ 42:745–766CrossRefGoogle Scholar
  46. Simoes AJG, Hidalgo CA (2011) The economic complexity observatory: an analytical tool for understanding the dynamics of economic development. Workshops at the twenty-fifth AAAI conference on artificial intelligenceGoogle Scholar
  47. UN (2016a) National accounts main aggregates database. GDP and its breakdown at constant 2005 prices in US dollars, 1990–2014, United Nations. Accessed 24 Sept 2016
  48. UN (2016b) United Nations. Office of the secretary general’s special adviser on community based medicine and lessons from Haiti. Accessed 11 Aug 2015
  49. UNDP (2016) United Nations Development Programme: Human Development Reports. Table 2: Trends in the Human Development Index, 1990–2014. Accessed 29 Oct 2016
  50. United Nations Office for Project Services (UNOPS) (2011) Rehabilitating roads and providing access in Haiti. Project title: emergency rehabilitation of Jacmel road. Accessed 5 Oct 2016
  51. USAID (2012) Haiti’s road less travelled. Frontlines online edition: economic growth, July/Aug 2012. Accessed 5 Oct 2016
  52. USAID (2013) Haiti—Hurricane Sandy, Fact Sheet #1, Fiscal Year 2013, 15 Feb 2013.
  53. US Department of State (2015) Status of post-earthquake recovery and development efforts in Haiti (Dec 2015). Accessed 5 Oct 2016
  54. World Bank (2013) Agriculture in Haiti: highly vulnerable, mostly uninsured, April 3. Accessed 17 Aug 2015
  55. World Bank (2015) Statistical capacity indicators, 2005–2014, World Bank. Accessed 11 Aug 2015
  56. World Bank (2016) World development indicators, 2004–2015, World Bank. Accessed 26 Sept 2016
  57. Worldwide Governance Indicators (2015) Accessed 29 Mar 2016

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2017

Authors and Affiliations

  1. 1.The Australian National UniversityCanberraAustralia

Personalised recommendations