Marco Modica (p)

Francesco Scotti

The aim of this article is to analyze the evolution of local economic activities in the province of L’Aquila before and after an earthquake rated 5.8 on the Richter scale hit the region in April 2009, causing the death of 308 people while around 65’000 people lost their houses. In particular, this study analyzes the evolution of the number of active firms in different sectors and located in the province of L’Aquila before and after the earthquake of 2009 in order to understand how the various economic sectors of the local industrial structure reacted to this external and unpredictable shock.
To identify how one of the considered earthquakes (and the subsequent policies put in place) affects the evolution of the birth, death and activity rates of firms in Italian provinces, we use the synthetic control approach to compare actual developments in these variables with a hypothetical situation, which would probably have arisen if these earthquakes did not hit these provinces.The analysis compares the evolution of the birth, death and activity rates of companies in Italian provinces from the 2000 until 2018.

Giulio Breglia (p), Marco Modica

Marco Modica

Scope of this paper is to explore how different territories can perform in response to positive and negative shocks. Territories is used on purpose as a vague term, where the object of study are municipalities but neighborhoods or hamlets as well, settlements with or without independent administrative power. The policy in analysis is the Italian public recovery subsidies after the 2009 earthquake of L’Aquila, where households have been supported for their own private houses reconstruction. The policy had the explicit goal to accelerate the recovery process, preventing a depopulation of affected areas, and the more implicit goal to maintain landowners’ wealth stable. The paper adopts a quasi-experimental approach to understanding how the use of reconstruction subsidies affected local attractivities, measured both in terms of population change and housing prices. Territories are clustered according to their distance to the seismic epicenter, peculiarly situated close to L’Aquila city center, adopting discontinuity design methods to assess the direct impact of these different clusters’ recovery processes and counterfactual methods for the impact in relative terms. Results show a displacement effect between negative earthquake damages and public reconstruction funds, with some heterogeneity in the geographical distribution. Surprisingly, as far the land gradient goes away from the epicenter, housing prices are relatively decreasing.

Francesco Scotti (p), Giovanni Baiocchetti

Giulio Breglia

We investigate the economic impact of the 2009 earthquake in L’Aquila labour market area (Italy) through a synthetic difference-in-differences method over the period 2004-2013. The shock immediately disrupted local economy with a 27.3% and 38.2% reduction in employment and firms number. However, these effects are not statistically significant as measured 5 years after the earthquake suggesting a rebound process in terms of employment and number of firms. Such findings are the result of heterogeneous dynamics across the manufacturing and
services sectors: the former exhibited a permanent contraction in the number of employees and firms, whereas the latter experienced a strong recovery after a short-term negative effect. Such dynamics induced an increase of sector dissimilarity of L’Aquila with respect to other labour market areas in Abruzzo.