Abstract
Very little is known about evacuation expenditures at the household level even though improved understanding of those expenditures can provide inputs for designing more effective evacuation programs and planning. We conducted a household survey in Harris and Galveston counties in Texas after being hit by hurricane Ike (one of the costliest hurricanes that have impacted the USA) to investigate the determinants of evacuation expenditures. Results suggest that household income, hurricane risks and household size are significant determinants of household evacuation expenditures. Our empirical analyses indicate that an average household would spend approximately $194 if a voluntary evacuation order is received and more than $300 if a mandatory evacuation order is received. These estimates may provide inputs for future hurricane evacuation planning.
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Notes
The decision to evacuate can be associated with personal and household characteristics that also affect household expenditures. If some of those characteristics are unobserved (i.e., included in the error term), estimated coefficients on SP can suffer from endogeneity bias. To address this issue, we estimated regime-switching models using attitudes toward hurricanes (i.e., IMPSURGE, IMPCRIME and IMPPETS) as instruments. Correlation estimates and Wald tests do not yield enough evidence to support the hypothesis that SP is an endogenous variable. Consequently, it can be concluded that estimated coefficients on SP here presented are not biased.
Results based on the stated expenditure data are similar in terms of sign and significance of estimated coefficients, with the exception of MANDATORY which is statistically insignificant presumably because there were few households who did not evacuate after receiving a mandatory evacuation order. In contrast, MANDATORY is the only factor to be found statistically significant when revealed expenditures are used alone. Those estimates are improved by using pooled expenditure data as suggested by Whitehead et al. (2008).
Since evacuation expenditures are modeled following a semilog specification, predicted values represent the median of the distribution rather than the average. The median is a more conservative estimate of evacuation expenditures given that expenditure distributions tend to be skewed to the right due to the existence of outliers.
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Acknowledgments
We acknowledge support from NOAA and National Science Foundation (Award #0838683). We are thankful to Hugh Gladwin, Maria Ilcheva and Carolyn Robertson at Florida International University for their support in pursuing this research. Participants at the NSF-NOAA Workshop on Communicating Hurricane Risk Information (2011), Southern Economic Association (2012), Eastern Economic Association (2013) and NSF CMMI Engineering Research and Innovation Conference (2012) provided very useful comments. However, the opinions expressed here are solely of authors.
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Mozumder, P., Vásquez, W.F. An empirical analysis of hurricane evacuation expenditures. Nat Hazards 79, 81–92 (2015). https://doi.org/10.1007/s11069-015-1828-1
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DOI: https://doi.org/10.1007/s11069-015-1828-1