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Localized commercial effects from natural disasters: The case of Hurricane Sandy and New York City

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  • Meltzer, Rachel
  • Ellen, Ingrid Gould
  • Li, Xiaodi

Abstract

This paper considers the localized economic impacts of a climate-related storm, Hurricane Sandy. Controlling for exposure to pre-storm risk, we exploit variation in post-storm inundation to identify the impact of storm-induced flooding on establishment survival, employment, and sales revenues. Results indicate that there were economic losses from Sandy and, as expected, they were concentrated among retail businesses with more localized consumer bases. After Sandy, retail establishments exposed to higher surge levels experienced 11 percentage point higher closure rates and 9 percent larger sales revenue declines compared to establishments with less exposure to inundation. In addition, closures were concentrated among standalone establishments. These losses appear to be fairly persistent, showing no sign of recovery to pre-storm levels by 2016. The evidence for jobs is more tentative—at most, they exacerbated an existing downward trend for retail establishments after Sandy.

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  • Meltzer, Rachel & Ellen, Ingrid Gould & Li, Xiaodi, 2021. "Localized commercial effects from natural disasters: The case of Hurricane Sandy and New York City," Regional Science and Urban Economics, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:regeco:v:86:y:2021:i:c:s0166046220302933
    DOI: 10.1016/j.regsciurbeco.2020.103608
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    Cited by:

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    3. Apurba, Roy & Ilan, Noy & Harold E., Cuffe, 2021. "Income and Extratropical Cyclones in New Zealand," Working Paper Series 21117, Victoria University of Wellington, School of Economics and Finance.
    4. Walls, Margaret A. & Wibbenmeyer, Matthew, 2023. "How Local are the Local Economic Impacts of Wildfires?," RFF Working Paper Series 23-03, Resources for the Future.
    5. Arnab K. Ghosh & Martin F. Shapiro & David Abramson, 2022. "Closing the Knowledge Gap in the Long-Term Health Effects of Natural Disasters: A Research Agenda for Improving Environmental Justice in the Age of Climate Change," IJERPH, MDPI, vol. 19(22), pages 1-9, November.
    6. Ahlfeldt, Gabriel M. & Gobillon, Laurent, 2021. "Introduction to the Special issue: “Emerging Trends in Urban Economics”," Regional Science and Urban Economics, Elsevier, vol. 90(C).
    7. Apurba Roy & Ilan Noy, 2023. "Impact of extratropical cyclones, floods, and wildfires on firms’ financial performance in New Zealand," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(4), pages 493-574, October.
    8. Guo, Wei & Liao, Yanjun (Penny) & Miao, Qing, 2023. "Managed Retreat and Flood Recovery: The Local Economic Impacts of a Buyout and Acquisition Program," RFF Working Paper Series 23-44, Resources for the Future.
    9. Andrew J. Van Leuven & Sarah A. Low & Edward (Ned) Hill, 2023. "What side of town? How proximity to critical survival factors affects rural business longevity," Growth and Change, Wiley Blackwell, vol. 54(2), pages 352-385, June.

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    More about this item

    Keywords

    Natural disaster; Retail; Resilience; Business;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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