Objective:

We assess the impact of 2016 Hurricane Earl on consumption and prices, two main variables to understand effects for economics.

Methodology:

In order to test how public policy soften economic impacts, we conduct a natural experiment and analyze data by using a difference-in-differencesapproach.

Results:

We learn that economic impacts, produced by Earl, is not properly softened, by public intervention. Households indeed decrease consumption to compensate income shocks after disasters. We found evidence of prices decreasing after disasters.

Limitations:

Because we started field research 6 days after the hurricane exposure, it is probably that we did not capture whole short-term effects; additionally, we do not know anything about medium-term effects, suggesting the need of return to the field research after some months.

Conclusions:

A reduction in prices followed by a reduction in consumption suggests short-term welfare losses, which could not be compensated by the million-dollar intervention of public policy.

        · abstract in Spanish     · text in Spanish     · Spanish ( pdf )