The effects of adaptation measures on hurricane induced property losses: Which FEMA investments have the highest returns?

TitleThe effects of adaptation measures on hurricane induced property losses: Which FEMA investments have the highest returns?
Publication TypeJournal Article
Year of Publication2018
JournalJournal of Environmental Economics and Management
Volume81
Pages93-114
Date Published09/2018
Abstract

This paper evaluates the relative effectiveness of FEMA expenditures on hurricane-induced property losses. We find that spending on FEMA ex-ante mitigation and planning projects leads to greater reductions in property losses than spending on ex-post adaptation programs? specifically, a one percent increase in annual spending on ex-ante risk reduction and warning projects reduces damages by 0.21 percent while a one percent increase in ex-post recovery and clean-up spending reduces damages by 0.12. Although both types of program spending are effective, we find the marginal return from spending on programs that target long-term mitigation and risk management to be almost twice that of spending on ex-post recovery programs. With the predicted increases in the frequency and severity of North Atlantic hurricanes in the future, our findings suggest there are important potential gains that could be realized from the further diversification of FEMA spending across project categories.

URLhttp://dx.doi.org/10.1016/j.jeem.2016.09.005
DOI10.1016/j.jeem.2016.09.005
Funding Program: 
Journal: Journal of Environmental Economics and Management
Volume: 81

This paper evaluates the relative effectiveness of FEMA expenditures on hurricane-induced property losses. We find that spending on FEMA ex-ante mitigation and planning projects leads to greater reductions in property losses than spending on ex-post adaptation programs? specifically, a one percent increase in annual spending on ex-ante risk reduction and warning projects reduces damages by 0.21 percent while a one percent increase in ex-post recovery and clean-up spending reduces damages by 0.12. Although both types of program spending are effective, we find the marginal return from spending on programs that target long-term mitigation and risk management to be almost twice that of spending on ex-post recovery programs. With the predicted increases in the frequency and severity of North Atlantic hurricanes in the future, our findings suggest there are important potential gains that could be realized from the further diversification of FEMA spending across project categories.

DOI: 10.1016/j.jeem.2016.09.005
Year of Publication: 2018
Citation:
Davlasheridze, M, K Fisher-Vanden, and H Klaiber.  2018.  "The effects of adaptation measures on hurricane induced property losses: Which FEMA investments have the highest returns?"  Journal of Environmental Economics and Management 81: 93-114, doi:10.1016/j.jeem.2016.09.005.