The Economic Impact of Hurricane Katrina on its Victims: Evidence from Individual Tax Returns

NBER Working Paper No. 20713

Issued in November 2014

NBER Program(s):Environment and Energy Economics, Public Economics



Hurricane Katrina destroyed more than 200,000 homes and led to massive economic and physical dislocation. Using a panel of tax return data, we provide one of the first comprehensive analyses of the hurricane’s long-term economic impact on its victims. Katrina had large and persistent impacts on where people live; small and mostly transitory impacts on wage income, employment, total income, and marriage; and no impact on divorce or fertility. Within just a few years, Katrina victims’ incomes fully recover and even surpass that of controls from similar cities that were unaffected by the storm. The strong economic performance of Katrina victims is particularly remarkable given that the hurricane struck with essentially no warning. Our results suggest that, at least in this particular disaster, aid to cover destroyed assets and short-run income declines was sufficient to make victims financially whole. Our results provide some optimism regarding the costs of climate-change driven dislocation, especially when adverse events can be anticipated well in advance.

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Document Object Identifier (DOI): 10.3386/w20713

Published: Deryugina, Tatyana, Laura Kawano, and Steven Levitt. 2018. "The Economic Impact of Hurricane Katrina on Its Victims: Evidence from Individual Tax Returns." American Economic Journal: Applied Economics, 10 (2): 202-33. DOI: 10.1257/app.20160307 citation courtesy of

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