The Social Value of Hurricane Forecasts
Working Paper 32548
DOI 10.3386/w32548
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What is the impact and value of hurricane forecasts? We study this question using newly-collected data for the universe of land-falling US hurricanes between 2005–2022. We find that forecasts drive adaptive protective expenditures, and that erroneous under-forecasts result in a significant increase in total hurricane damage. Our main contribution is a new theoretically-grounded approach for estimating the marginal value of forecast improvements. We find that improvements since 2007, after the implementation of a national policy to improve hurricane forecasts, have reduced total costs by 19%, averaging $2 billion per hurricane. These benefits far exceed the annual budget of the policy, as well as for all federal weather forecasting.
Non-Technical Summaries
- Hurricane forecasts are critical to government agencies that plan both pre- and post-landfall storm responses. More accurate forecasts...