Economic Impact of Droughts in Southern Brazil, a Duration Analysis

Natural disasters are currently a matter of great concern worldwide. Droughts are among the most recurrent episodes, causing significant private losses and thus worsening the economic situation of regions that depend on agriculture and livestock. This article presents a study of the duration of droughts in the southernmost state of Brazil, which has a large agriculture production and has shown recurrent events over the last two decades. The approach focuses on the time of economic recovery and whether economic impacts occurred, in the years of 2020, 2022, and 2023, and for this purpose it uses the total value of invoices issued in the municipality by companies to consumers and between them. To this end, the Kaplan-Meier estimator and the Cox regression model were used to analyze the economic recovery rates of the municipalities, also using factors such as their size, geographic location and main sector of economic activity. The results show that the longest recovery time is concentrated in small cities and cities that have agricultural or livestock activities as their main activity, and also show greater resilience in cities in the metropolitan region, which has a tributary of many rivers and is more concentrated in services and industry, with larger cities. The study identify that in each year at least 75% of the municipalities have their economic recovery within 3 months. The findings allow a better planning for both prevention and mitigation of the effects of droughts. They are also relevant for the design of economic and social policies.