Event Title

How Mitigation Spending Affects Ex Post Disaster Damages

Mentor 1

Matthew Winden

Mentor 2

David Welsch

Location

Union 250

Start Date

24-4-2015 1:00 PM

Description

In this paper, effects of mitigation spending on the ex post damages (in dollars) of flood disaster incidences are analyzed using United States county-level data from the years 1989 to 2010. This topic is important because of the study of damages incurred by major natural disaster events, such as Hurricane Katrina (Masozera, et al. 2007) and also the study environmental and social benefits from undertaking mitigation projects (Kousky and Walls 2014). Previous research has shown specific examples of not only the need but also the benefits of mitigation projects. I use a fixed effects estimation to attempt to reduce any arbitrary correlation between unobserved factors in my data. The data also determine how past incidences and spending have continuing effects on later years’ ex post damages. I expect the results to show that more mitigation spending in previous years produce large reductions in following years. Furthermore, ex ante mitigation spending on the reduction of ex post flood disaster damages appears to level off, diminishing, in following years, as one would expect, e.g. building a dam one year might reduce disaster damages, until the dam wears down and no longer prevents flood damages. Results indicate current mitigation spending is sub optimal relative to expenditures on repairing ex post damages.

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Apr 24th, 1:00 PM

How Mitigation Spending Affects Ex Post Disaster Damages

Union 250

In this paper, effects of mitigation spending on the ex post damages (in dollars) of flood disaster incidences are analyzed using United States county-level data from the years 1989 to 2010. This topic is important because of the study of damages incurred by major natural disaster events, such as Hurricane Katrina (Masozera, et al. 2007) and also the study environmental and social benefits from undertaking mitigation projects (Kousky and Walls 2014). Previous research has shown specific examples of not only the need but also the benefits of mitigation projects. I use a fixed effects estimation to attempt to reduce any arbitrary correlation between unobserved factors in my data. The data also determine how past incidences and spending have continuing effects on later years’ ex post damages. I expect the results to show that more mitigation spending in previous years produce large reductions in following years. Furthermore, ex ante mitigation spending on the reduction of ex post flood disaster damages appears to level off, diminishing, in following years, as one would expect, e.g. building a dam one year might reduce disaster damages, until the dam wears down and no longer prevents flood damages. Results indicate current mitigation spending is sub optimal relative to expenditures on repairing ex post damages.