Dynamic and Spatial Impact of Hurricane Andrew on Florida'S Taxable Sales: An Intervention Analysis

This paper shows how intervention analysis can be used to estimate the dynamic and spatial impact of recovery from a natural disaster. Specifically, it shows how to estimate three distinct phases of recovery: immediate impact, transitory recovery impact, and negative aftershock. It also discusses the estimation of a permanent impact. The method is then used to estimate the impact on Florida's taxable sales of the recovery from Hurricane Andrew. Estimates are provided of the immediate and total impact in five regions, and the length of the recovery is discussed. The results are compared to earlier impact studies of natural disasters on taxable sales. On the basis of studies of other hurricanes, it is found that the recovery from Hurricane Andrew has taken much longer than might be expected It is also found that, despite the magnitude of the insurance and transfer payments received by victims, the impact on taxable sales was within the normal variation of taxable sales at the state level, but significantly larger at the MSA level.