Tesis
Hurricanes, flood risk and the economic adaptation of businesses
Autor
Ortega, Francesc
Institución
Resumen
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.