Structural path analysis of extreme weather events: An application to Hurricane Katrina and Superstorm Sandy

Abstract

Interests are growing in the distributional impact of natural catastrophes. Motivated by the increasing frequency and intensity of extreme weather events, the present study proposes the use of structural path analysis (SPA) to identify the paths that render certain populations more vulnerable to an economic shock. The analysis proceeds in three main stages. The first stage employs geographic information systems (GIS) maps to identify economic activities disrupted by virtue of their geo-location in directly affected areas. The direct sectoral impact is subsequently fed into a social accounting matrix (SAM) model in the second stage to estimate the ripple effects generated by the network of economic linkages. SPA is deployed in the final stage to determine the paths through which the impact ripples from the shock's origin to households. Because SAM disaggregates households into distinct categories, the multiplier decomposition procedure enables SPA to identify the specific links that transmit the shock to every household category. The approach is employed to examine the New York City case in the backdrop of Superstorm Sandy and compare it with post-Katrina New Orleans. The results suggest that while relatively well-off New Yorkers may have suffered the most from Sandy's path of destruction, the New Orleans poor appeared most vulnerable in Katrina's aftermath.