Economic impact of droughts in southern Brazil, a duration analysis

Abstract

Hydrometeorological hazards are currently a cause for great concern worldwide. Droughts are among the most recurrent events, causing significant losses. This article presents a study on the duration of droughts in the southernmost state of Brazil, which has a large agricultural sector and experiences frequent drought events. The approach focuses on the economic recovery time of municipalities affected by the drought in 2020, 2022 and 2023, using the total value of invoices issued within each municipality between companies and from companies to consumers. The Kaplan–Meier estimator and Cox regression models are applied, incorporating covariates such as the size of the municipality, geographic location, and primary economic activity sector. The results show that the longest recovery period is concentrated in small cities, particularly in those where agriculture or livestock is the primary economic activity. The greatest resilience is observed in cities within the metropolitan region, where economic activity is more concentrated in services and industry and where populations are generally larger. The study identifies that after each drought event, at least 75% of municipalities achieve economic recovery within 3 months. These findings support better planning for both drought prevention and impact reduction and they are relevant for the development of economic and social policies.