Australia's Black Summer wildfires recovery: A difference-in-differences analysis using nightlights

This study examines how communities of New South Wales (NSW), Australia, recovered from the extreme wildfire event of 2019–2020 (i.e., the Black Summer fires). Using monthly night-time radiance as an indicator of economic activity in a geographic area (i.e., a mesh block) from January 2017 to June 2021, I conducted a spatio-temporal and socio-economic analysis of economic recovery after the 2019–2020 wildfires using the difference-in-differences method. This is the first study to examine the intersectional role of space with time and socio-economic characteristics for extreme wildfire recovery. The findings reveal that wildfire-affected locations had about 0.038σ and 0.026σ lower night-time radiance in major cities and rural hinterlands (i.e., inner regions), respectively, than the unaffected areas. These numbers translate to approximately 30% reduction in economic activities in both areas. The findings remain consistent when using Facebook's movement range data. The pace of recovery varied spatially across time and socio-economic groups. In rural hinterlands of NSW, wildfire-affected communities, both poor and non-poor, followed a slower recovery trajectory than wildfire-affected city dwellers. In major cities, the economic recovery of poor communities lagged behind non-poor communities. Accounting for such spatial, temporal and socio-economic heterogeneity in the natural hazard recovery process can support the design of equitable wildfire risk reduction and management strategies and programs. If unaddressed, gaps in wildfire recovery can increase location and economic group specific vulnerabilities to future wildfires. Note that nightlights are not a good proxy for economic activity in heavily forested remote and rural areas; thus limiting the application of the use of high frequency satellite data for wildfire recovery analysis only in major cities and rural hinterlands.