Economics Seminar (Empirical): Eyal Frank, University of Chicago

Eyal Frank, Assistant Professor at the Harris School of Public Policy, University of Chicago

The Value of Disaster Prevention: The Desert Locust

Abstract: What makes investing in disaster prevention systems economically optimal? The necessary underlying monitoring systems are costly to maintain, and it can be even costlier to act upon the signals they provide. The larger the ratio between the damages that preventative action avoids, and the maintenance and mitigation costs of the system, the more beneficial the system is. We study this question in the context of the impact of locust swarm outbreaks --- known to devour entire agricultural fields --- on human well-being. Our analysis combines data from 1985 to 2020 across Sub-Saharan Africa and Southeast Asia on the monitoring of locust populations, and data from the Demographic and Health Surveys. We find that in-utero exposure to a locust swarm reduces height-for-age by 0.36 standard deviations, and increases the probability of stunting by 7 percentage points (a 16% increase). In addition, we find meaningful reductions in educational attainment and age at first marriage for women who experience high cumulative exposure in childhood and adolescence. Because locust monitoring suffers from non-classical measurement error---monitoring is targeted towards control operations and is non-representative in its coverage---we develop an instrumental variable. Our approach uses the LASSO with data from locust breeding areas---where monitoring is much more consistent---to generate predicted locust swarm values outside of the breeding areas. We then use this instrument to recover consistent signs, and comparable magnitudes for the treatment effects of locust exposure, relative to the fixed effects regressions.