Thursday, February 25, 2010

Economics of Natural Hazards

Natural hazards have fascinated and frightened us since earliest times.  From Noah’s flood to Pompeii’s volcano, natural disasters form a terrifying theme in ancient literature.  In modern times, scientists have dramatically increased their understanding of these events, while engineers have designed buildings and infrastructure that minimize the destructive effects of natural hazards.  It is only recently, however, that social scientists have begun to examine the impact these events have on society at large, as well as policies intended to lessen those effects.  Perhaps the most obvious “societal impact” is the economic costs of hazard events on individuals and institutions.  In the aggregate, these costs can be huge.  Hurricane Andrew caused 16 billion in insured losses and perhaps twice that amount in uninsured losses.  Thirteen years later, Hurricane Katrina, cost an estimated 34 billion in insured losses and over 200 billion in federal outlays not to mention the horrific number of casualties.  Economists are interested in finding ways to reduce the impacts of disasters, but also the effects these events have on labor, financial and other markets affected by community disruption.

My hope for this blog is that it fulfills two purposes.  First, I will serve as a Fulbright Scholar in Norway with the International Centre for Geohazards during Spring 2010 and the blog will give me a venue to chronicle this experience.  Secondly, I plan to continue the blog as my research on this topic evolves.