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Are Natural Hazards Temporally Random?

Applied Geography, Vol. 5, No. 1, pp. 5-12, 1985

8 Pages Posted: 19 Sep 2010  

Philip E. Graves

University of Colorado at Boulder - Department of Economics

Anne E. Bresnock

California State Polytechnic University, Pomona

Date Written: January 1, 1985

Abstract

The paper employs statistical hypothesis tests to explore the question of whether natural hazards (hail and tornadoes being considered here) are or are not intertemporally random. The answer to this question, at least for these two hazards, is surprising and has important policy implications: hazards appear to be more likely in year t if an event was experienced in year t- 1: hence, apparent ‘Gambler’s Fallacy’ behavior on the part of farmers and others may indeed be rational. Should this result hold for a full range of climate-related hazard types, as we suspect, hundreds of millions of dollars of crop loss and other damages may be preventable (e.g., rotating to frost-resistant crops if past events suggest greater than usual likelihood of early or late frost}. The degree of positive serial correlation is also seen to vary a great deal regionally. with individuals in some states being unable to benefit from knowledge of prior hazard occurrence.

Keywords: Natural hazards, hail, tornadoes, intertemporal correlation of natural hazards

JEL Classification: H12, H43, Q10, Q19, Q28, Q38, Q54, Q58

Suggested Citation

Graves, Philip E. and Bresnock, Anne E., Are Natural Hazards Temporally Random? (January 1, 1985). Applied Geography, Vol. 5, No. 1, pp. 5-12, 1985. Available at SSRN: https://ssrn.com/abstract=1679224

Philip E. Graves (Contact Author)

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309-0256
United States

Anne E. Bresnock

California State Polytechnic University, Pomona ( email )

3801 W. Temple Avenue
Pomona, CA 91768
United States

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