Hurricanes, Flood Risk and the Economic Adaptation of Businesses

Arbeitspapier

This paper argues that increases in perceived flood risk entail a negative and persistent shock to local economic activity. Our analysis is based on a rich administrative dataset that contains all business establishments in New York City around the time of hurricane Sandy. Our data also identifies exactly which buildings suffered flooding-related damage due to the hurricane. We find evidence of a persistent reduction in the employment and wage income of establishments that suffered damage, along with higher exit rates. The persistence of the effects is consistent with an upward revision of flood-risk beliefs triggered by the hurricane. These findings suggest that businesses are adapting to the higher flood-risk environment by shifting operations toward safer areas. This adjustment process may mitigate the city-wide costs associated to sea-level rise.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 12474

Classification and Topics

• Classification: Wirtschaft ; National Security and War ; Illegal Behavior and the Enforcement of Law ; Nonagricultural and Nonresidential Real Estate Markets
• Subject: climate change ; sea-level rise ; economic adaptation ; hurricane sandy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Indaco, Agustín ; Ortega, Francesc ; Taspinar, Süleyman
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/202820
• Last update: 10.03.2025, 11:43 AM CET