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The Social Value of Hurricane Forecasts

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  • Molina, Renato
  • Rudik, Ivan

    (Cornell University)

Abstract

What is the impact and value of hurricane forecasts? We study this question using newly-collected forecast data for major US hurricanes since 2005. We find higher wind speed forecasts increase pre-landfall protective spending, but erroneous under-forecasts increase post-landfall damage and rebuilding expenditures. Our main contribution is a new theoretically-grounded approach for estimating the marginal value of forecast im- provements. We find that the average annual improvement reduced total per-hurricane costs, inclusive of unobserved protective spending, by $700,000 per county. Improve- ments since 2007 reduced costs by 19%, averaging $5 billion per hurricane. This exceeds the annual budget for all federal weather forecasting.

Suggested Citation

  • Molina, Renato & Rudik, Ivan, 2022. "The Social Value of Hurricane Forecasts," SocArXiv sqtjr_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:sqtjr_v1
    DOI: 10.31219/osf.io/sqtjr_v1
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