Weathering the Storm: The Financial Impacts of Hurricanes Harvey and Irma on One Million Households
32 Pages Posted: 9 Mar 2018 Last revised: 15 Mar 2018
Date Written: February 28, 2018
How do disasters affect households financially? The JPMorgan Chase Institute draws transaction-level data from over one million checking account holders to provide a first-ever daily look at the impacts of Hurricanes Harvey and Irma on financial outcomes. We find that checking account inflows temporarily dropped by over 20 percent, or roughly $400, in the week of landfall for both Harvey and Irma and recovered quickly in Houston, but not so in Miami. Checking account outflows dropped by more than 30 percent, or roughly $500, in the week of landfall and barely recovered 12 weeks after. The changes in spending resulted in welfare losses for some families.
Among all spending categories, healthcare dropped the most. Because outflows dropped to a greater extent and for a longer period of time than inflows, families’ checking account balances remained steady or grew in the short run. But these healthier balances may mask incidents of deferred medical and debt payments, as well as anticipated costs to repair homes and replace property. In this sense, in the face of a hurricane, families appeared financially resilient, but may not have been economically resilient.
Keywords: Household Finance, Hurricanes, Income, Consumption, Debt Payments, Savings
JEL Classification: Q54, D12, D14, J30
Suggested Citation: Suggested Citation