The long-run welfare impact of hydrological extremes in sub-Saharan Africa

The economic impact of dry and wet spells is increasingly investigated, also relative to anthropogenic climate change. Combining high-resolution wealth estimates and long-run (1901-2018) hydrological records for nearly one million settlements , here we empirically estimate the long-run welfare impact of hydrological events in sub-Saharan Africa (SSA). To achieve causal identification, we adopt a generalised propensity score approach allowing for continuous longitudinal treatments. Our results suggest that hydrological events played a long-lasting impact in shaping the current wealth distribution patterns in SSA. While even moderate dry spells diminished wealth (on average -$110 in the local per-capita GDP for each additional dry month), only extreme wet spells show a significant impact, but this is significantly harsher (-$387). We examine the temporal variability of estimates and discuss the significance of adaptive capacity. Our findings support the consideration of adaptation investment to mitigate future impacts and an exacerbation of existing inequalities.