IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v52y2024i2p222-252.html
   My bibliography  Save this article

The Fiscal Consequences of Natural Disasters: Evidence from the U.S. States

Author

Listed:
  • Omer Bayar
  • Todd Richard Yarbrough

Abstract

The paper investigates the fiscal impact of natural disasters in the U.S. states. The focus is on state spending, state revenues, and federal transfers for the period from 1970 to 2015. Results show that a broad definition based on dollar damages from all emergency events and major disasters has a small effect on state-level fiscal conditions, which stands in contrast to prior studies. On the other hand, a narrower definition based on the occurrence of major disasters is associated with increased spending and transfers alongside spending effects that grow with disaster severity.

Suggested Citation

  • Omer Bayar & Todd Richard Yarbrough, 2024. "The Fiscal Consequences of Natural Disasters: Evidence from the U.S. States," Public Finance Review, , vol. 52(2), pages 222-252, March.
    • Handle: RePEc:sae:pubfin:v:52:y:2024:i:2:p:222-252
    DOI: 10.1177/10911421231179535
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/10911421231179535
    Download Restriction: no
    File URL: https://libkey.io/10.1177/10911421231179535?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. W. J. Wouter Botzen & Howard Kunreuther & Jeffrey Czajkowski & Hans de Moel, 2019. "Adoption of Individual Flood Damage Mitigation Measures in New York City: An Extension of Protection Motivation Theory," Risk Analysis, John Wiley & Sons, vol. 39(10), pages 2143-2159, October.
    2. Yilin Hou, 2013. "State Government Budget Stabilization," Studies in Public Choice, Springer, edition 127, number 978-1-4614-6061-9, June.
    3. Wagner, Gary A., 2003. "Are state budget stabilization funds only the illusion of savings?: Evidence from stationary panel data," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(2), pages 213-238.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhao, Bo, 2016. "Saving for a rainy day: Estimating the needed size of U.S. state budget stabilization funds," Regional Science and Urban Economics, Elsevier, vol. 61(C), pages 130-152.
    2. Christian Buerger & Vincent Reitano & Ciana Sorrentino, 2022. "State fiscal reserves: Supplementation and substitution over economic boom and bust years," Public Budgeting & Finance, Wiley Blackwell, vol. 42(1), pages 98-118, March.
    3. Bachtrögler, Julia & Badinger, Harald & Fichet de Clairfontaine, Aurélien & Reuter, Wolf Heinrich, 2014. "Summarizing Data using Partially Ordered Set Theory: An Application to Fiscal Frameworks in 97 Countries," Department of Economics Working Paper Series 181, WU Vienna University of Economics and Business.
    4. Gary Wagner & Russell Sobel, 2006. "State budget stabilization fund adoption: Preparing for the next recession or circumventing fiscal constraints?," Public Choice, Springer, vol. 126(1), pages 177-199, January.
    5. Craig E. Landry & Dylan Turner & Daniel Petrolia, 2021. "Flood Insurance Market Penetration and Expectations of Disaster Assistance," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(2), pages 357-386, June.
    6. repec:cup:judgdm:v:17:y:2022:i:1:p:189-214 is not listed on IDEAS
    7. Hwa-Taek Lee & Gawon Yoon, 2013. "Does purchasing power parity hold sometimes? Regime switching in real exchange rates," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2279-2294, June.
    8. Bo Zhao, 2014. "Saving for a rainy day: estimating the appropriate size of U.S. state budget stabilization funds," Working Papers 14-12, Federal Reserve Bank of Boston.
    9. Buso, Marco & Marty, Frederic & Tran, Phuong Tra, 2017. "Public-private partnerships from budget constraints: Looking for debt hiding?," International Journal of Industrial Organization, Elsevier, vol. 51(C), pages 56-84.
    10. Max Tesselaar & W. J. Wouter Botzen & Timothy Tiggeloven & Jeroen C. J. H. Aerts, 2023. "Flood insurance is a driver of population growth in European floodplains," Nature Communications, Nature, vol. 14(1), pages 1-14, December.
    11. Munir Ahmad & Nadeem Akhtar & Gul Jabeen & Muhammad Irfan & Muhammad Khalid Anser & Haitao Wu & Cem Işık, 2021. "Intention-Based Critical Factors Affecting Willingness to Adopt Novel Coronavirus Prevention in Pakistan: Implications for Future Pandemics," IJERPH, MDPI, vol. 18(11), pages 1-28, June.
    12. Thomas A. Garrett & Gary A. Wagner, 2004. "State government finances: World War II to the current crises," Review, Federal Reserve Bank of St. Louis, vol. 86(Mar), pages 9-25.
    13. Yilin Hou, 2005. "Fiscal Reserves and State Own-Source Expenditure in Downturn Years," Public Finance Review, , vol. 33(1), pages 117-144, January.
    14. Michelle L. Lofton, 2022. "The impact of excess taxing capacity on short‐term resources," Public Budgeting & Finance, Wiley Blackwell, vol. 42(1), pages 3-27, March.
    15. Sebastian Seebauer & Philipp Babcicky, 2020. "The Sources of Belief in Personal Capability: Antecedents of Self‐Efficacy in Private Adaptation to Flood Risk," Risk Analysis, John Wiley & Sons, vol. 40(10), pages 1967-1982, October.
    16. Osberghaus, Daniel & Botzen, Wouter & Kesternich, Martin & Iurkova, Ekaterina, 2022. "The Intention-Behavior Gap in Climate Change Adaptation," VfS Annual Conference 2022 (Basel): Big Data in Economics 264073, Verein für Socialpolitik / German Economic Association.
    17. W. J. Wouter Botzen & Jantsje M. Mol & Peter J. Robinson & Juan Zhang & Jeffrey Czajkowski, 2022. "Individual hurricane evacuation intentions during the COVID-19 pandemic: insights for risk communication and emergency management policies," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 111(1), pages 507-522, March.
    18. Peter John Robinson & W. J. Wouter Botzen, 2022. "Setting descriptive norm nudges to promote demand for insurance against increasing climate change risk," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(1), pages 27-49, January.
    19. Rauter, Magdalena & Kaufmann, Maria & Thaler, Thomas & Fuchs, Sven, 2020. "Flood risk management in Austria: Analysing the shift in responsibility-sharing between public and private actors from a public stakeholder's perspective," Land Use Policy, Elsevier, vol. 99(C).
    20. Wenchi Wei & Dwight V. Denison, 2019. "State Rainy Day Funds and Government General Fund Expenditures: Revisiting the Stabilization Effect," Public Finance Review, , vol. 47(3), pages 465-492, May.
    21. Jantsje M. Mol & W. J. Wouter Botzen & Julia E. Blasch, 2022. "After the virtual flood: Risk perceptions and flood preparedness after virtual reality risk communication," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 17(1), pages 189-214, January.

    More about this item

    Keywords

    climate change; natural disasters; state spending; state revenues; federal transfers; JEL Codes:; H7; H84; Q54;
    All these keywords.

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:52:y:2024:i:2:p:222-252. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.