July, 2008

Can New Orleans Benefit from Market Approaches for Flood Protection?

  • Peter Gordon

    Mercatus Center Affiliated Senior Scholar
  • Richard Little

    Director, Keston Institute for Public Finance and Infrastructure Policy, University of Southern California
Key materials
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The United States is an entity exposed to an abundance of natural hazards. There has been a major increase in the cost of natural disasters over the past 15 years and a comparison of the economic losses (corrected for inflation) due to natural disasters worldwide over each decade for the past 50 years reveal a huge increase. The key socio-economic factor causing these increased losses is development in hazard-prone areas which puts increased value at risk. In the U.S., although much of the cost of natural hazard events is underwritten by private insurance, when an event is escalated to the status of "disaster" the federal government has stepped in to provide disaster assistance of various kinds. This assistance amounts to a de facto property and casualty insurance to which all U.S. taxpayers contribute.