A Quantitative Method for Estimating Probable Public Costs of Hurricanes

/ A method is presented for estimating probable public costs resulting from damage caused by hurricanes, measured as local government expenditures approved for reimbursement under the Stafford Act Section 406 Public Assistance Program. The method employs a multivariate model developed through multiple regression analysis of an array of independent variables that measure meteorological, socioeconomic, and physical conditions related to the landfall of hurricanes within a local government jurisdiction. From the regression analysis we chose a log-log (base 10) model that explains 74% of the variance in the expenditure data using population and wind speed as predictors. We illustrate application of the method for a local jurisdiction-Lee County, Florida, USA. The results show that potential public costs range from $4.7 million for a category 1 hurricane with winds of 137 kilometers per hour (85 miles per hour) to $130 million for a category 5 hurricane with winds of 265 kilometers per hour (165 miles per hour). Based on these figures, we estimate expected annual public costs of $2.3 million. These cost estimates: (1) provide useful guidance for anticipating the magnitude of the federal, state, and local expenditures that would be required for the array of possible hurricanes that could affect that jurisdiction; (2) allow policy makers to assess the implications of alternative federal and state policies for providing public assistance to jurisdictions that experience hurricane damage; and (3) provide information needed to develop a contingency fund or other financial mechanism for assuring that the community has sufficient funds available to meet its obligations. KEY WORDS: Hurricane; Public costs; Local government; Disaster recovery; Disaster response; Florida; Stafford Act