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Hurricane Fatalities and Hurricane Damages: Are Safer Hurricanes More Damaging?

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  • Nicole Cornell Sadowski
  • Daniel Sutter

Abstract

The rising cost of hurricanes and other natural hazards has been a concern to policy makers and insurance industry executives. We offer a heretofore overlooked explanation for rising hurricane damages—the reduction in fatalities from hurricanes. Improved hurricane forecasts, more extensive evacuations, and other improvements make hurricanes less lethal, reducing the full cost of living on hurricane‐prone coasts, and should paradoxically increase damages. We confirm this prediction by analyzing land‐falling hurricanes in the mainland United States between 1940 and 1999. We first estimate a time‐varying measure of hurricane lethality and then show that this measure significantly affects damages in hurricane‐prone coastal areas.

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  • Nicole Cornell Sadowski & Daniel Sutter, 2005. "Hurricane Fatalities and Hurricane Damages: Are Safer Hurricanes More Damaging?," Southern Economic Journal, John Wiley & Sons, vol. 72(2), pages 422-432, October.
    • Handle: RePEc:wly:soecon:v:72:y:2005:i:2:p:422-432
    DOI: 10.1002/j.2325-8012.2005.tb00710.x
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    Cited by:

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    2. Boudreaux, Christopher & Jha, Anand & Escaleras, Monica, 2022. "Natural Disasters and Entrepreneurship Activity: the Moderating Role of Country Governance," MPRA Paper 115134, University Library of Munich, Germany.

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