IDEAS home Printed from https://ideas.repec.org/p/hai/wpaper/200905.html
   My bibliography  Save this paper

A Hurricane’s Long-Term Economic Impact: the Case of Hawaii’s Iniki

Author

Listed:
  • Makena Coffman

    () (Department of Urban and Regional Planning, University of Hawaii at Manoa
    University of Hawaii Economic Research Organization)

  • Ilan Noy

    () (Department of Economics, University of Hawaii at Manoa)

Abstract

The 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.

Suggested Citation

  • Makena Coffman & Ilan Noy, 2009. "A Hurricane’s Long-Term Economic Impact: the Case of Hawaii’s Iniki," Working Papers 200905, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:200905
    as

    Download full text from publisher

    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_09-5.pdf
    File Function: First version, 2009
    Download Restriction: no

    References listed on IDEAS

    as
    1. 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, September.
    2. Noy, Ilan, 2009. "The macroeconomic consequences of disasters," Journal of Development Economics, Elsevier, vol. 88(2), pages 221-231, March.
    3. Heger, Martin & Julca, Alex & Paddison, Oliver, 2008. "Analysing the Impact of Natural Hazards in Small Economies: The Caribbean Case," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    4. 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.
    5. 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.
    6. 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.
    7. Jacob Vigdor, 2008. "The Economic Aftermath of Hurricane Katrina," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 135-154, Fall.
    8. 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.
    9. 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.
    10. 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, April.
    11. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The long-term impact of hurricanes
      by Economic Logician in Economic Logic on 2009-08-28 19:52:00

    More about this item

    Keywords

    natural disasters; hurricane; Iniki; Kauai; Hawaii;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Lists

    This item is featured on the following reading lists or Wikipedia pages:
    1. Economic Logic blog

    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:hai:wpaper:200905. See general 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). General contact details of provider: http://edirc.repec.org/data/deuhius.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.