A Hurricane’s Long-Term Economic Impact: the Case of Hawaii’s Iniki
AbstractThe importance of understanding the macro-economic impact of natural disasters cannot be overstated. Hurricane Iniki, that hit the Hawaiian island of Kauai on September 11th, 1992, offers an ideal case study to better understand the long-term economic impacts of a major disaster. Iniki is uniquely suited to provide insights into the long-term economic impacts of disaster because (1) there is now seventeen years of detailed post-disaster economic data and (2) a nearby island, Maui, provides an ideal control group. Hurricane Iniki was the strongest hurricane to hit the Hawaiian Islands in recorded history, and wrought an estimated 7.4 billion (2008 US$) in initial damage. Here we show that Kauai’s economy only returned to pre-Iniki levels 7-8 years after the storm; though 17 years later, it has yet to recover in terms of its population and labor force. As we document, these long-term adverse impacts of disasters are ‘hidden.’ They are not usually treated as ‘costs’ of disasters, and are ignored when cost-benefit analysis of mitigation programs is used, or when countries, states, and islands attempt to prepare, financially and otherwise, to the possibility of future events.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200905.
Length: 22 pages
Date of creation: 01 Jun 2009
Date of revision:
Find related papers by JEL classification:
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-17 (All new papers)
- NEP-ENV-2009-07-17 (Environmental Economics)
- NEP-HIS-2009-07-17 (Business, Economic & Financial History)
- NEP-TUR-2009-07-17 (Tourism Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ilan Noy, 2007.
"The Macroeconomic Consequences of Disasters,"
200707, University of Hawaii at Manoa, Department of Economics.
- Ethan Ilzetzki & Carlos A. Vegh, 2008. "Procyclical Fiscal Policy in Developing Countries: Truth or Fiction?," NBER Working Papers 14191, National Bureau of Economic Research, Inc.
- Eduardo A. Cavallo & Patricio Valenzuela & Eduardo Borensztein, 2007.
"Debt Sustainability under Catastrophic Risk: The Case for Government Budget Insurance,"
6847, Inter-American Development Bank.
- Eduardo Borensztein & Eduardo Cavallo & Patricio Valenzuela, 2009. "Debt Sustainability Under Catastrophic Risk: The Case for Government Budget Insurance," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 12(2), pages 273-294, 09.
- Eduardo A. Cavallo & Patricio Valenzuela & Eduardo Borensztein, 2007. "Debt Sustainability under Catastrophic Risk: The Case for Government Budget Insurance," Research Department Publications 4522, Inter-American Development Bank, Research Department.
- Eduardo Borensztein & Eduardo A. Cavallo & Patricio Valenzuela, 2008. "Debt Sustainability Under Catastrophic Risk: The Case for Government Budget Insurance," Research Department Publications 2011, Inter-American Development Bank, Research Department.
- Mark Skidmore & Hideki Toya, 2002. "Do Natural Disasters Promote Long-Run Growth?," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 664-687, October.
- Halliday, Timothy, 2006.
"Migration, Risk, and Liquidity Constraints in El Salvador,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 54(4), pages 893-925, July.
- Timothy Halliday, 2005. "Migration, Risk and Liquidity Constraints in El Salvador," Working Papers 200511, University of Hawaii at Manoa, Department of Economics, revised 28 Mar 2006.
- Jacob Vigdor, 2008. "The Economic Aftermath of Hurricane Katrina," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 135-54, Fall.
- Crespo Cuaresma & Hlouskova & Obersteiner, 2008. "Natural Disasters As Creative Destruction? Evidence From Developing Countries," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 214-226, 04.
- Anbarci, Nejat & Escaleras, Monica & Register, Charles A., 2005.
"Earthquake fatalities: the interaction of nature and political economy,"
Journal of Public Economics,
Elsevier, vol. 89(9-10), pages 1907-1933, September.
- Nejat Anbarci & Monica Escaleras & Charles A. Register, 2004. "Earthquake fatalities: the interaction of nature and political economy," Working Papers 0415, Florida International University, Department of Economics.
- Heger, Martin & Julca, Alex & Paddison, Oliver, 2008. "Analysing the Impact of Natural Hazards in Small Economies: The Caribbean Case," Working Paper Series RP2008/25, World Institute for Development Economic Research (UNU-WIDER).
- Ilan Noy & Aekkanush Nualsri, 2007. "What do Exogenous Shocks Tell Us about Growth Theories?," Working Papers 200728, University of Hawaii at Manoa, Department of Economics.
- Ilan Noy & Aekkanush Nualsri, 2008.
"Fiscal Storms: Public Spending and Revenues in the Aftermath of Natural Disasters,"
200809, University of Hawaii at Manoa, Department of Economics.
- Noy, Ilan & Nualsri, Aekkanush, 2011. "Fiscal storms: public spending and revenues in the aftermath of natural disasters," Environment and Development Economics, Cambridge University Press, vol. 16(01), pages 113-128, February.
- Eduardo A. Cavallo & Eduardo Borensztein & Patricio Valenzuela, 2008. "Debt Sustainability Under Catastrophic Risk," IMF Working Papers 08/44, International Monetary Fund.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:reading lists or Wikipedia pages:Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Web Technician).
If references are entirely missing, you can add them using this form.