A new study from Steven Levitt of Freakonomics fame and two co-authors shows that Hurricane Katrina raised the incomes of the New Orleans residents whose homes it ruined and lives it displaced.
How? Perhaps by forcing residents to move to areas with more economic opportunity, and perhaps by making New Orleans a more expensive place to live, thus obligating its residents to earn more. (That means that their cost of living increased along with those earnings increases.) “Our results do not imply that the utility of the storm victims improved,” the authors caution.
But there is an upshot, they think: “Our results provide some optimism regarding the costs of climate-change driven dislocation, especially when adverse events can be anticipated well in advance.” So don’t worry! When the big one hits, we’ll just move the population of Louisiana to the Bakken or San Francisco and call it a day.