A common problem for policy makers that wish to support programs that mitigate against risk is that people do not generally wish to pay for programs to reduce risks when the consequences of an event are not foremost in their thoughts. However, strong support for such programs is evident immediately after an event like a hurricane happens. Support generally fades over time, in the absence of another hurricane. This study will examine the nature of this eroding support, focusing on society's perception of risks. Psychologists and other social scientists have long known that a person's beliefs about the magnitude of risks and the magnitude assessed by experts can be quite different from each other, but such differences are rarely introduced in economic models of behavior. The decision to move back to the Gulf Coast is an example of such behavior. Since policy is often responsive to public perceptions of risk following such events, understanding the "rationality" of perceptions at that time and how preferences change over time will be valuable to the scientific and policy processes. This study allows the dynamics of risk and ambiguity (uncertainty about risks themselves) and gain insight into how subjective risk and ambiguity change over time for people exposed to a natural disaster.
Residents of Gulf Coast regions hit by Hurricane Katrina have been transported to a variety of places around the United States, including hundreds relocated to Bryan/College Station (BCS), Texas. Researchers will establish contact with a sample of transplanted residents to gauge their current risk perception for damage from future hurricanes and find their current maximum willingness to pay (WTP) for hurricane risk-reduction programs. We will track the members of the sample for approximately one year, and collect information on those perceptions and WTP at the end of the year. A novel way will be used to determine WTP: the valuation question will be based on willingness to relocate to locations that face a variety of levels of hurricane risk. A sample of evacuees and a control sample of BCS residents will also be interviewed to examine differences between evacuees risk perceptions and those of BCS residents.
The study will provide an estimate of people's willingness to return to areas with significant hurricane risk, both in the recent aftermath of a large and devastating hurricane, and, unless another hurricane of similar magnitude occurs, a year later in the absence of a recent one.
