Financial Vulnerability and Personal Finance Outcomes of Natural Disasters

61 Pages Posted: 6 Nov 2017

See all articles by Kelly D. Edmiston

Kelly D. Edmiston

Center for Insurance Policy & Research / NAIC; University of Missouri Department of Economics

Date Written: September 1, 2017


I evaluate the effects of hurricanes of varying intensity on the financial condition of a typical resident in both affected and unaffected census tracts, where the degree of affect is determined by the relative location of a census tract’s boundary with buffers around the tracks of hurricane eyes that occurred in the years 2000-2014. The primary question in the article is whether financial vulnerability, or, alternatively, “financial preparedness,” affects post-hurricane disaster financial outcomes.

I find that hurricanes tend to lower credit scores, for the most, but outcomes are far from uniform across categories of hurricanes. I attribute these differences largely to number of disasters in each quarter of the study period, levels of disaster aid, and media coverage and political interest. In some cases I surmise that those in the 25-mile buffer may benefit from economic stimulus that follows a hurricane, but do not have damages and other economic losses to the same extent as those within a 15-mile buffer. Modeling hurricanes as “treatments” and interacting them with variables from consumer credit reports, I find that the financial vulnerability of residents in affected census tracts is associated with poorer financial outcomes. Considering lags, financial vulnerability is shown to have a considerable impact on post-hurricane personal finance outcomes.

JEL Classification: Q54, R11, I31

Suggested Citation

Edmiston, Kelly D., Financial Vulnerability and Personal Finance Outcomes of Natural Disasters (September 1, 2017). Available at SSRN: or

Kelly D. Edmiston (Contact Author)

Center for Insurance Policy & Research / NAIC ( email )

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Suite 1500
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8167838067 (Phone)

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University of Missouri Department of Economics ( email )

Columbia, MO 65203
United States

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