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Hot Topics: Economic Cost of Disasters

Hurricane Katrina plowed through the Mississippi basin in August 2005 leaving a trail of devastation that may take years to recover from economically. Other natural disasters while not as deadly as hurricane Katrina, also have exacted their economic toll. The articles below will discuss this issue.

Selected articles

Due to contractual arrangements, access to some articles may be restricted to the Stanford community, and subscribers of the "Library Databases" offered through the GSB Alumni's Lifelong Learning Program. Inclusion below does not imply University endorsement of the ideas expressed.

 

Managing large-scale risks in a new era of catastrophes. Wharton, 3/2008
The recent upsurge in hurricanes, coupled with increasing residential and
commercial development in coastal areas of the United States, has exposed people and property to an entirely new scale of destruction, with cascading effects on homeowners, businesses located within these devastated areas and those depending on them, insurance and financial markets, and the public sector.
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The impact of disasters on small business disaster planning: a case study. Disasters, 12/2007
Improved disaster planning is an aid to business recovery and the results demonstrate the need for more widespread efforts to improve disaster recovery planning on the part of smaller businesses, even in areas that have recently experienced disasters.
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Controlling Wildfire Risk. BusinessWeek Online, 11/5/07
This article focuses on the projected losses from the wildfires in Southern California.
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Natural Disasters, Economic Development, and Humanitarian Aid. Journal of Economic Perspectives, Volume 21, No. 3, Summer 2007
Natural disasters are one of the major problems facing humankind. The economic costs are considerable and rising. The direct economic damage from natural disasters between 1980-2004 is estimated at around $1 trillion.
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Time to Master Disaster. Finance & Development, March 2007
Innovations in insurance can help countries manage the fiscal impact of natural disasters.
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Operating Costs Are Imperiling Disaster Fund. New York Times, Jan. 18, 2007
The federal government's biggest program to help people rebuild after natural disasters is on the verge of running out of operating money because of budgeting problems at the agency that runs it, the Small Business Administration.
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Tax Policy and the Fiscal Cost of Disasters: NY and 9/11. National Tax Journal, Sept. 2006
While the terrible attack on the World Trade Centers on September 11, 2001 caused a substantial short-run shock to New York City's economy, the city demonstrated substantial economic resilience over the longer run.
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The long, strange resurrection of New Orleans. Fortune, Aug. 29, 2006
Hurricane Katrina was the biggest natural disaster in US history-and its aftermath became the biggest management disaster in history as well. A year later, Fortune lays bare this surreal tale of incompetence, political cowardice…and rebirth.
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Study Finds Huge Fraud in the Wake of Hurricanes. New York Times, Jun. 13, 2006
As much as $1.4 billion in government disaster aid to victims of Hurricanes Katrina and Rita-nearly a quarter of the total-went to bogus or undeserving victims, a new Congressional investigation concludes.
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Economic development and the impacts of natural disasters, June 2006
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Levee Repair Costs Triple. Washington Post, Mar. 31, 2006
The Bush administration said yesterday that the cost of rebuilding New Orleans's levees to federal standards has nearly tripled to $10 billion and that there may not be enough money to fully protect the entire region.
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A Cost-Benefit Analysis of the New Orleans Flood Protection System. Regulatory Analysis 06-02. Mar 2006.
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A Katrina Brownout. Newsweek, Feb. 20, 2006
This article concerns stalled federal rebuilding efforts in New Orleans, Louisiana in the wake of Hurricane Katrina. It talks about the controversy of rebuilding sections of New Orleans destroyed by the storm that are located in vulnerable low-lying areas.
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Aftershocks: Natural Disaster Risk and Economic Development Policy. ODI Briefing Paper, Nov. 2005
When and where should the 'dismal science' of economics give more attention to natural disasters? It is too soon to try to draw longer term lessons from the most recent, extreme and high profile events.
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Material costs, availability impacted by hurricanes. Hotel & Motel Management, Nov. 7, 2005
This article presents views from Ken Simonson, chief economist for the Associated General Contractors of America, regarding the impact of hurricanes Katrina and Rita on material price increases and availability in the U.S.
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Challenges in Measuring Hurricane Costs. American Banker, Oct. 31, 2005
The article reports on the efforts of banks to recover after Hurricane Katrina. Costs resulting from the hurricane include uninsured losses on properties, incidental expenses for room, board, and travel for relocated employees, and lost revenue from waived fees. However, the most significant cost was in provisions for loan losses.
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The Macroeconomic and Budgetary Effects of Hurricanes Katrina and Rita: An Update. Congressional Budget Office, Sept. 29, 2005
Hurricanes Katrina and Rita have temporarily reduced the growth of economic output, but the effects that rebuilding will have on economic activity may more than offset the drag by early next year.
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Consumer confidence falls most in 15 years. Washington Post, Sept. 28, 2005
Consumer confidence this month plummeted by the most since the 1990 oil price spike and recession, triggered by the big jump in gasoline prices and rise in unemployment after Hurricane Katrina.
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The (Big) Ripple Effect. U.S. News and World Report, Sept. 12, 2005
Most Americans watched the ravages of Katrina's Category 4 winds and floodwaters from a safe distance, but they won't be able to escape the storm's economic aftershocks. From California to Maine, the commute to work will cost more. The price of a morning cup of joe is soon to rise. Anyone visiting a hardware store for building supplies should expect sticker shock. And it might be a good idea to stow away some extra cash to pay this winter's home heating bills.
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Let Katrina Be a Warning. BusinessWeek Online, Sept. 1, 2005
It is a natural disaster of unprecedented proportions for America. But the irony and the tragedy of the killer storm called Katrina is that the hurricane's devastating effects were entirely predictable -- and largely preventable.
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Taking Cover. Economist, June 18, 2005
The article reports on the property-and-casualty (P&C) insurance industry. The P&C business looks impressively fit, given last year's record $27.3 billion in insured natural-disaster losses, of which 83% were hurricane-related.
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Forests and Natural Disasters. The IUCN/ WWF Forest Conservation Newsletter, Mar. 2005
Evidence from the tsunami, as summarized in this issue, confirms that in some cases at least well-established mangrove forests and coastal tree plantations offered an effective physical barrier against the tidal waves, and helped save both lives and property.
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The Indian Ocean Tsunami: Economic Impact, Disaster Management and Lessons, 2005
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Natural Disasters: Counting the Cost. The World Bank, Mar. 2, 2004
Natural disasters are happening more often and having an ever more dramatic impact on the world in terms of both their human and economic cost. While the number of lives lost declined in the past 20 years-800,000 people died from natural disasters in the 1990s compared with 2 million in the 1970s-the number of people affected has risen. In the past decade, the number of people affected by natural disasters tripled to 2 billion.
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Economics of Natural Disasters: A Critical Review, 2003.
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Natural Disasters: Can The Economy Weather the Storm? Economic Development Digest, Aug. 2002
The economic impacts of weather are often far-reaching and long lasting. The National Oceanic and Atmospheric Administration (NOAA) reports that 10 percent of industries that contribute to the nation's Gross Domestic Product (GDP) are "weather and climate sensitive," including outdoor sports and recreation, construction, energy distribution and agriculture.
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Page updated by: Nora Richardson