Decoding Sectoral Dynamics: Unveiling the Heterogeneous Effects of Earthquakes

Natural hazards can result in a severe loss of human lives and have direct and indirect economic impacts. However, average effects may mask substantial differences across events and sectors. This paper examines two significant earthquakes that occurred in Italy in 2009 and 2012 to unveil the heterogeneous effects that such events may have. Employing the innovative Synthetic Difference-in-Differences method (SDID), we find that both earthquakes exhibit a positive impact on the total Gross Value Added (GVA). However, a granular analysis of disaggregated measures reveals not only variations between the two events but also distinct effects across specific sectors. This nuanced understanding highlights the importance of considering sector-specific dynamics in the aftermath of seismic events.