Disaster Relief Policy Research Articles

Recovering from catastrophes: Federal disaster relief policy and politics, by Peter J. May. Westport: Greenwood Press, 1985, 186 pp. Price: $35.00 cloth

Recovering from catastrophes: Federal disaster relief policy and politics, by Peter J. May. Westport: Greenwood Press, 1985, 186 pp. Price: $35.00 cloth

Natural Disaster Relief and Horizontal Equalization in Australia*

The commonwealth government's natural disaster relief policy over the period of 1970-1971 to 1977-1978 required each state to undertake a particular base expenditure on natural disaster relief before Commonwealth assistance was payable. This article examines the impact of this policy on horizontal between the states, an imbalance which arises because of differences in fiscal capacity and/or differences in the cost of providing public services between the states. It is concluded that the policy exacerbated rather than counteracted this particular imbalance. A set of base expenditure requirements which takes this imbalance into account is then calculated.

Disaster Insurance: A Tool for Hazard Mitigation

This paper evaluates alternative measures for mitigating losses to residential structures from natural disasters. The first part focuses on the effect of liberalized federal disaster relief policies on the types of structures which will be built in hazard-prone areas. Both physical losses from disasters as well as intangible costs, such as the value of a human life, are considered in the evaluation of two alternative type structures. The second part of the paper discusses four extreme costbearing approaches to cover losses from natural disasters: (i) Total federal responsibility, (ii) Self insurance by the homeowner, (iii) Required insurance protection, (iv) Land use restrictions and building codes. The concluding section suggests a plan for mitigating future losses based on comprehensive disaster insurance coupled with land use measures and building codes regulations. A critical question which remains to be answered is whether disaster insurance should be voluntary or required. During the past several years the United States has had more than its usual share of damage from the natural elements: an earthshaking experience in San Fernando, a windblown affair in Lubbock, Texas, and stormy Agnes creating havoc in the Northeast. Not only have these recent disasters demonstrated that nature knows no boundaries but they have underlined the importance of pre-disaster planning. One of the lessons to be learned from these recent events is the failure of communities and individuals to protect themselves adequately against potential damage from disasters. In San Fernando, a number of buildings including a newly occupied hospital did not withstand the force of the quake. Few individuals living in the area carried earthquake insurance even though the rates were relatively modest. For example, the premium rate for wood frame houses is twenty cents per $100 of coverage for straight earthquake insurance and fifteen cents per $100 if the risk is endorsed on Howard Kunreuther, Ph.D., is Associate Professor in The Wharton School of the University of Pennsylvania. He is co-author of The Economics of Natural Disasters: Implications for Federal Policy (New York: Free Press, 1969) which received the 1971 Elizur Wright Award. Dr. Kunreuther's monograph, Recovery From Natural Disasters: Insurance or Federal Aid?, was published in 1973 by the American Enterprise Institute. This paper was submitted in March, 1973. The author gratefully acknowledges support for this paper from NSF-RANN grant GI 39587.