The economic cost of war in Gaza

Remote sensing quantifies the destruction of both infrastructure and economic activity  from the war in Gaza. Satellite-based data reveals that more than three quarters of Gaza’s economy has been wiped out since the Israel-Hamas war began in October 2023. Even before the war, economic conditions in Gaza—one of the most densely populated places on Earth—were challenging, in part due to long-standing blockades. To measure the impact of the war in near real time, Daniele Rinaldo and colleagues analyzed high-resolution radar data from the Sentinel-1 satellite. Reviewing images captured roughly every week through October 31, 2024, the authors found that 82% of Gaza’s land area has sustained damage at least once. The team also tracked changes in night-time luminosity, a widely used proxy for economic activity. Their analysis shows a 68.5% drop in night-time light intensity caused by the damage, indicating a steep decline in both human and economic activities, with a small but significant increase observed during the November 2023 ceasefire. By linking pre-war luminosity levels to income and spending patterns, the authors estimate that the conflict caused average GDP and household welfare losses of almost 75% across Gaza, increasing to 97% for the most heavily damaged areas, amounting to a loss of some 2.6 billion USD. According to the authors, their methodology of combining remote sensing and econometric techniques can allow real-time assessments of the economic impacts of wars and humanitarian crises, especially in areas where on-the-ground data is difficult to obtain.

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