Adjusting to natural disasters

V. Kerry Smith, Jared C. Carbone, Jaren C. Pope, Daniel G. Hallstrom, Michael E. Darden

Research output: Contribution to journalArticlepeer-review

91 Scopus citations


People adjust to the risks presented by natural disasters in a number of ways; they can move out of harms way they can self protect or they can insure. This paper uses Hurricane Andrew the largest U.S. natural disaster prior to Katrina to evaluate how people and housing markets respond to a large disaster. Our analysis combines a unique ex post database on the storm's damage along with information from the 1990 and 2000 Censuses in Dade County Florida where the storm hit. The results suggest that the economic capacity of households to adjust explains most of the differences in demographic groups' patterns of adjustment to the hurricane damage. Low income households respond primarily by moving into low-rent housing in areas that experienced heavy damage. Middle income households move away to avoid risk and the wealthy for whom insurance and self-protection are most affordable appear to remain. This pattern of adjustment with respect to income is roughly mean neutral so an analysis based on measures of central tendency such as median income would miss these important adjustments.

Original languageEnglish (US)
Pages (from-to)37-54
Number of pages18
JournalJournal of Risk and Uncertainty
Issue number1-2
StatePublished - Sep 2006


  • Economic adjustment
  • Hurricanes
  • Natural hazards

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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