1. IntroductionHurricanes long threatened the coastal areas of the United States. The nation has invested millions of dollars to understand and forecast hurricanes. Research efforts led by the National Hurricane Center (Simpson 1998) succeeded in making land-falling hurricanes less deadly. In the 1990s, the modernization of the National Weather Service, featuring the installation of the Advanced Weather Interactive Processing System to process data from radar, satellites, and surface observations at high speeds and a nationwide network of Doppler weather radars, contributed to improved forecasts of weather hazards (Friday 1994). Annual hurricane fatalities fallen from 0.5 per million residents nationally during the 1950s to 0.05 per million residents during the 1980s and 1990s. Kunkel, Pielke, and Changnon (1999) attribute the decline to improved hurricane forecasts.1Although hurricanes become less deadly over time, hurricane damages increased, particularly in recent years. By 1995, hurricane damage in the 1990s had already exceeded total damage in the 1970s and 1980s combined. This escalation has led to interest among policy makers and researchers regarding the causes of increasing hurricane damages. Some observers attribute rising damages to an increase in the number and severity of hurricanes; for instance, a 1995 congressional report asserts that hurricanes have become increasingly frequent and severe over the last four decades as climatic conditions changed in the tropics (cited in Pielke and Landsea 1998, p. 623). This explanation, however, is simply false. Katz (2002) for instance finds no statistically significant increase in the number of land-falling hurricanes over time.2 And the period from 1991 to 1994 had the fewest tropical storms of any four-year period in the last 50 years.Increasing societal vulnerability, that is, more people and wealth along hurricane-prone coasts, seems to explain increasing hurricane damages. illustrates the increase in coastal county populations during the 20th century. The figure graphs the population growth rates by decade for 130 Atlantic and Gulf coast counties and for the United States overall. As illustrated, the coastal counties grew faster than the nation in each decade. A wealthier population will also more property vulnerable to destruction by a hurricane. Pielke and Landsea (1998), Changnon and Hewings (2001), and Katz (2002) find no time trend for hurricane damages after normalizing for changes in population and wealth in addition to inflation.An understanding of increasing hurricane losses requires an explanation for the increase in coastal county populations, and several been advanced. One is the rising standard of living in the United States: wealthier people will spend more on luxuries, such as living near the ocean. Another possibility involves low-probability event bias. Considerable evidence suggests that people do not behave according to expected utility theory with respect to low-probability, high-consequence events like hurricanes. Instead of considering the expected cost of these events, which is considerable, people act as if such events couldn't happen to me and treat the low probability as a zero probability (Kunreuther et al. 1978; Camerer and Kunreuther 1989). Finally, a number of government policies, including subsidized insurance, disaster assistance, and structural restoration measures (e.g., rebuilding roads and restoring beaches after storms) contribute to overbuilding on hurricane-prone coasts (Platt 1999).3We consider an alternative explanation, one which, to our knowledge, has not been widely discussed, namely the very reduction in hurricane lethality. Through improved hurricane warnings, better evacuation, and engineering advances, the probability of fatalities has been reduced, thereby decreasing the expected cost of living along hurricane-exposed coasts. …