This paper analyzed the effects of weather events on households’ welfare in the Philippines. The estimation strategy was two-pronged. The fixed-effects (FE) estimator was used to remove the unobserved heterogeneity. The non-instrumental variable (IV) FE estimator was used on expenditure items for which income is exogenous, with the IV-FE estimator used on expenditure items for which income is endogenous. To address the endogeneity of income, two sets of instruments were used: (1) the deviation of heat index from its normal values and (2) the number of tropical cyclones that crossed the provinces.

Weather Events and Welfare in Philippine Households
Weather Events and Welfare in Philippine Households