What Impact Do Hurricanes Have on the Economy?

Like scenes out of a horrific sci-fi movie, bodies spread everywhere, cars lodged in trees and on top of houses, crying and mass mania are only a few characteristics of a hurricane’s aftermath.

According to the National Hurricane Center five of the top ten costliest hurricanes ever to strike the United States has struck within the past three years. Hurricanes Charley, Ivan, Frances, Jeanne, Katrina, and Wilma all have left their mark and an expensive one at that.

The combination of the first four alone is $45 billion including Katrina and Wilma would probably double or triple that figure. With this sudden surge of deadly and costly weather, it’s a wonder people haven’t left and gone to live overseas. Florida, Texas, Louisiana and North Carolina are the most prone to hurricanes, with 264 hurricanes from 1851-2004, these states have learned a valuable lesson in hurricane preparedness. Like moths to a fire hurricanes are significantly attracted to them, but what does it mean for the economy of these states? What about the economy of the entire country, no wait the entire world!

As a rule of supply and demand the less of a product the more demand there is, the more demand there is the higher the price of the product because of it’s scarcity. When these massive storms tear through the open ocean in the Gulf of Mexico and places near the coast it causes a chain reaction in the economy, first it takes out the oil refineries and the petroleum producing derricks which in turn causes a gas shortage, which will eventually lead to higher prices in gas and petroleum using products, and cut the population’s buying capacity which some say could lead to a depression.

Since 1995 the Atlantic has seen the most active period of activity since hurricanes were actually recorded in the 1850’s. With weather experts predicting this surge of fierce and powerful hurricanes to continue to rock our side of the world for the next decade or two what will be the long term impact of such a dilemma?

American society can expect a good increase in the price of heating oil, which experts say could rise as high as 31% during winters in the northern states if the current trend continues, and a dramatic increase in the insurance department could send some running for the mountains. Amid the warm sunsets set across blue ocean horizons is it really worth staying in these predisposed hurricane states, is it really worth the cost?