A quantitative method for estimating probable public costs of hurricanes

A method is presented for estimating probable public costs resulting from d amage caused by hurricanes, measured as local government expenditures appro ved 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 mete orological, socioeconomic, and physical conditions related to the land-fall of hurricanes within a local government jurisdiction. From the regression analysis we chose a log-log (base 10) model that explains 74% of the varian ce in the expenditure data using population and wind speed as predictors. W e 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 e stimate 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 oi poss ible hurricanes that could affect that jurisdiction; (2) allow policy maker s to assess the implications of alternative federal and state policies for providing public assistance to jurisdictions that experience hurricane dama ge; and (3) provide information needed to develop a contingency fund or oth er financial mechanism for assuring that the community has sufficient funds available to meet its obligations.