Business Return in New Orleans: Decision Making Amid Post-Katrina Uncertainty
Date
2009-08-26
Authors
Lam, Nina S. N.
Pace, R. Kelley
Campanella, Richard
LeSage, James P.
Arenas, Helbert
Journal Title
Journal ISSN
Volume Title
Publisher
Public Library of Science
Abstract
Background: Empirical observations on how businesses respond after a major catastrophe are rare, especially for a catastrophe as great as Hurricane Katrina, which hit New Orleans, Louisiana on August 29, 2005. We analyzed repeated telephone surveys of New Orleans businesses conducted in December 2005, June 2006, and October 2007 to understand factors that influenced decisions to re-open amid post-disaster uncertainty.
Methodology/Principal Findings: Businesses in the group of professional, scientific, and technical services reopened the fastest in the near term, but differences in the rate of reopening for businesses stratified by type became indistinguishable in the longer term (around two years later). A reopening rate of 65% was found for all businesses by October 2007. Discriminant analysis showed significant differences in responses reflecting their attitudes about important factors between businesses that reopened and those that did not. Businesses that remained closed at the time of our third survey (two years after Katrina) ranked levee protection as the top concern immediately after Katrina, but damage to their premises and financing became major concerns in subsequent months reflected in the later surveys. For businesses that had opened (at the time of our third survey), infrastructure protection including levee, utility, and communications were the main concerns mentioned in surveys up to the third survey, when the issue of crime became their top concern.
Conclusions/Significance: These findings underscore the need to have public policy and emergency plans in place prior to the actual disaster, such as infrastructure protection, so that the policy can be applied in a timely manner before business decisions to return or close are made. Our survey results, which include responses from both open and closed businesses, overcome the “survivorship bias” problem and provide empirical observations that should be useful to improve micro-level spatial economic modeling of factors that influence business return decisions.
Description
Keywords
surveys, flooding, crime, insurance, finance, natural disasters, Louisiana, decision making
Citation
Lam, N. S. N., Pace, R. K., Campanella, R., LeSage, J., & Arenas, H. (2009). Business return in New Orleans: Decision making amid post-Katrina uncertainty. PLoS One, 4(8), e6765.
Rights
Rights Holder
© 2009 Lam et al.
Rights License
This work is licensed under a Creative Commons Attribution 4.0 International License.