Wealth and Income Effects of Natural Disasters: An Econometric Analysis of Hurricane Hugo
Year: 1993
Type: article
Abstract: Following natural disasters, many regions face substantial losses of wealth. However, some sectors experience temporary gains in economic activity as a result of insurance claims and other short-term income flows. This paper examines the economic gains and losses from Hurricane Hugo in South Carolina. The analysis is based on a multi-sector regional econometric model, which allows us to examine the state’s economy “with and without” the storm. We first obtained estimates based on pre-Hugo period data. Then, we simulated the state’s economy in the post-Hugo period based on the actual values of national economic variables during the reconstruction period-yielding the “without” storm estimates. We found that the income gains were neutral overall, despite a major surge in some sectors. Even in these sectors, the economic gain remained below the unreimbursed wealth loss. Thus, the catastrophe had a net negative economic effect.
Source: Review of Regional Studies
DOI: 10.52324/001c.9106
Institutions: University of South Carolina, Universidade do Porto
Language: English
Subfield: Transportation
Field: Social Sciences
Domain: Social Sciences
SDG: No poverty
Open Access status: hybrid
OpenAlex ID: W1527603387