Economics of Disasters and Climate Change

, Volume 1, Issue 2, pp 179–202 | Cite as

Understanding and Mitigating the Impacts of Massive Relocations Due to Disasters

  • Vicki Marion BierEmail author
Review Paper


We have grown used to thinking of displaced persons as a developing-world problem. However, Hurricane Katrina and the Japanese tsunami/nuclear disaster made clear that even in the developed world people may need to leave their homes due to natural or man-made disasters. This can occur for reasons ranging from nuclear accidents, to natural disasters (e.g., hurricanes), to terrorism (e.g., a major anthrax attack), to climate change (e.g., coastal flooding). In addition to the social consequences of forced relocation, massive relocation can have significant economic costs, including not only property damage, but also business interruption, loss of housing services, and decline of property values. Economic consequences can be expected to be highly nonlinear in both magnitude and duration of relocation. With regard to duration, a brief evacuation may be minimally disruptive, if people are able to return to their homes within a few days. A relocation of a few months or a year would be much more disruptive per day, but eventually, costs per day would diminish or approach zero. By contrast, costs can be expected to increase monotonically but non-linearly in the number of people needing to be relocated. Costs may also vary greatly depending on the nature of the assets that are interdicted. Unfortunately, disasters in populated areas can easily result in the need to relocate a million people or more. This argues for the need for research on interventions to encourage relocation before a disaster in areas under significant threat, and to increase resilience after massive relocations.


Relocation Displaced persons Natural disasters Terrorism Climate change Coastal flooding 

MSC Classification


JEL Classification



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© Springer International Publishing 2017

Authors and Affiliations

  1. 1.University of Wisconsin-Madison College of EngineeringMadisonUSA

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