The effect of economic variables on natural disasters and the impact of disasters on economic variables

This study aims to study how disaster losses are affected by unemployment and poverty, then how disasters also cause income inequality in Indonesia and the causal relationship between disaster losses and income inequality. To determine the structural relationship between economic variables and disaster losses, the Structural Equation Model-Partial Least Squares (SEM - PLS) approach is used. This approach is an approach previously not found in economic and environmental studies. This study uses secondary data consisting of 30 years 1990–2019 collected from the territory of Indonesia. The results of the study found that unemployment and poverty variables had a significant effect on the disaster loss variable. The disaster loss variable has a significant effect on the income inequality variable. The income inequality variable has no effect on the disaster loss variable. Research is expected to contribute to the study of the impact of economic development and the environment.