This paper also relates to several recent articles that study how the impact of disasters vary with a country's structural characteristics or stage of development. Toya and Skidmore (2007) study the relation between various country characteristics besides income and the expected mortality and losses (as fraction of GDP) caused by natural disasters in a sample of 151 countries between 1960 and 2003, nding that higher educational attainment, greater openness, a strong nancial sector, and smaller government were associated with a smaller cost of disasters. Benson et al. (2004) argue on theoretical grounds that the impact of disasters is the highest among middle income countries, where sectors are more interconnected than in poor countries but lack the coping mechanisms available in rich countries. These predictions are partially supported by evidence from Kellenberg and Mobarak (2008), who show that the relation between income and the deaths arising from oods and windstorms has an inverted U-shape. This paper contributes to this literature by providing complementary evidence on the costs of disasters across dierent groups of countries.

Finally, the paper also relates to the new empirical research on the macroeconomic consequences of climate change, in particular, to Dell et al. (2008), who estimate the impact of changes in temperature on growth at annual frequencies, and nd that temperature increases have a signicantly negative eect on growth in poor countries. The evidence on this paper complements Dell et al. (2008), by showing that droughts and extreme temperature episodes, those most likely related to rising temperatures indeed have a stronger impact on low income countries.

The rest of the paper is structured as follows. Section 2 describes the data sources, the main variables to use and presents summary statistics for the incidence of natural disasters around the world. Section 3 presents the empirical methodology used in the paper to estimate the output consequences of natural disasters. Section 4 presents in detail the main results of the paper. Section 5 concludes.

# 2 Data

Data for natural disasters were obtained from the Emergency Disasters Database (EM-DAT) maintained by the for Research on the Epidemiology of Disasters (2008) (CRED). This is a comprehensive database that includes data on the occurrence and eects of over 12,800 mass-disasters in the world since 1900, and is compiled from a diversity of sources. As a general principle, to enter into the database an event has to meet any of the following conditions: there are ten or more people reported killed; there are 100 or more people reported aected; a state of emergency is declared; or there is a call for international assistance.

The data contain information on various types of disasters that I classify in three broad categories. Geological disasters include earthquakes, landslides, volcano eruptions, and tidal waves. An important characteristic of this type of events is their unpredictability and relatively fast onset. The second category is climatic disasters. This category includes oods, droughts, extreme temperatures, and windstorms (e.g. hurricanes). Compared to the previous category, some of these disasters can be forecasted well in advance (so precautions can be undertaken) and have a relatively long onset.

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