Job Market Paper
Agglomeration Beyond Productivity: Economic Organization
and Resilience to Natural Disasters
Agglomeration generates economic benefits by concentrating economic activity, but whether these same urban structures amplify or mitigate vulnerability to natural disasters remains unclear.
I examine how the effects of natural disasters vary with industrial composition, road networks, and trade linkages across U.S. metropolitan areas.
Natural disasters reduce local economic activity by approximately 3 percent on average.
Valuing the associated loss in electricity service, the median estimated economic loss is equivalent to approximately 14 percent of monthly MSA GDP.
The effect varies substantially with urban structure. The decline is more than twice as large in MSAs with greater industrial concentration,
while it is around half as large in MSAs with more centralized road networks and stronger intra-city goods sourcing.
The relationship with industrial concentration also depends on where that concentration occurs. Disaster impacts are smaller
where concentration is greater in Manufacturing, but larger where concentration is greater in Accommodation, Wholesale Trade,
and Transportation and in Health and Education. These findings show that the effects of natural disasters depend systematically on the
preexisting organization of urban economic activity, making resilience an important dimension of how the benefits and costs of agglomeration are evaluated.
