The Economics of Natural Disasters

After about three weeks of exploring Italy from the big city of Rome to little Fontecchio, it is clear to me that Italy is a special place. Deciding what to take a picture of here is extremely difficult because just about everything is picture-worthy. When we visited the town of L'Aquila, however, I finally didn't have this problem.

L'Aquila was hit with a huge earthquake a few years ago and suffered devastating damages. Construction workers, piles of dirt and rubble, and abandoned homes were everywhere. It was hard to find a place to get a coffee because a lot of places were closed or had moved locations.

Our article described the economics of natural disasters. Over the years, natural disasters have increased but deaths per disaster have decreased along with the number of people affected. Research has found that geography dictates the probability of a natural disaster and the effect a natural disaster will have on a region. This means that places near fault lines are most likely to have earthquakes and areas near the coast are most likely to have windstorms or tsunamis than other natural disasters. Foreign aid programs have greatly reduced the deaths that occur due to climatic natural disasters such as drought. It has been found that the GDP of a country may decrease up to 2% after a natural disaster, but an increase in new capital may help remedy this loss.

As we saw in L'Aquila, natural disasters may also force many people and businesses to relocate. Former homes were adandoned and broken into and businesses had notices on their storefronts that they had relocated due to the earthquake. The article talked about a particularly devastating natural disaster that happened in Florida where the housing prices post-disaster decreased by 19%. The effects that natural disasters have are real and terrifying.

L'Aquila is still a beautiful place even with all of the construction and ruin. All of the time and effort being put into restoring the town to its former glory is inspiring and it'd be great to visit the town again sometime in the future when it is fully restored.

-Chaney and Crystal

Below are a few pictures of the damage in the town of L'Aquila from the earthquake.