Models of Location Choice and Willingness to Pay to Avoid Hurricane Risks for Hurricane Katrina Evacuees
March 2010 (VOL. 28, NO. 1)
We report on subjects’ perceptions of the risks of hurricanes and relocation decisions. Our sample contains individuals displaced by Hurricane Katrina or Rita in Gulf-coast areas, as well as a comparison group of people, not much affected by the hurricanes. Results are presented for two choice experiments, conducted immediately after the hurricane and again roughly one year later, in which we evaluate the trade-offs between given levels of risks and income, while controlling for amenities and other location characteristics. We find that perceptions of risk and damages fade, and willingness to pay to obtain protection falls over time.