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Opportunity, Like Disaster, Strikes

Opportunity, Like Disaster, Strikes

From the ancient trade city of Ephesus which was deserted due to erosion, to Pripyat, Ukraine, which was evacuated following the Chernobyl meltdown, to the earthquakes that decimated Tohoku, Japan in 2011, history has shown that environmental disasters are a constant threat to civilization.

That is why Dr. Ariel Belasen, associate professor of economics and finance, has spent several years engaging in projects and analyses on the effects of natural disasters on local and regional populations. By gauging the impact of catastrophes such as hurricanes, Belasen is helping to find ways that policy makers can, if not prevent disasters, at least speed up recovery from them.

Ariel BelsenBelasen’s attention to disaster-related research projects began as early as his time as an undergraduate student, but it was at a special colloquium put on by the Southern Economic Association in 2008 when he saw that the policy implications of his research could be put into action. While undertaking his initial disaster-related project on the impact of hurricanes on local labor markets, Belasen was invited to speak at the event. There at the colloquium, held in New Orleans, on the anniversary of the aftermath of Hurricanes Katrina and Rita, he had what he called an “eye-opening experience.”

While half of the population of New Orleans still had yet to return, a panel of economists, including Belasen, discussed potential solutions to the many problems the city faced if it was to be rebuilt. Belasen revealed that his work showed how when employers in hurricane-stricken counties offered higher wages, it would, in an act of what economists call, “creative destruction,” help reverse some of the emigration.

Belasen also found that, aside from the financial impact, hurricanes and other disasters have played a major role in migration patterns throughout history, as developing countries typically do not have the resources or capacity to recover fully after a major disaster. In their 2013 study, “Migration as a Result of Natural Disasters,” Belasen and Dr. Solomon Polachek of Binghamton University found that those with the means to leave those countries would do so. This, according to Belasen, has caused emigration rates to spike following severe disasters.

While Belasen’s research focuses on data gathered in the aftermath of disasters, the goals of such projects are often concerned with preparing to face challenges of the next inevitable catastrophe. This is true of Dr. Belasen’s latest study, which was completed with Dr. Chifeng Dai of Southern Illinois University Carbondale. Published under the title, “When Oceans Attack: Assessing the Impact of Hurricanes on Localized Taxable Sales,” it used data from Florida’s Bureau of Economic and Business Research to examine the financial and economic implications of a series of hurricanes on the state of   Florida.

Of the study’s results, Belasen said, “States like Florida which do not have an income tax rely heavily on sales and usage taxes. So when a hurricane disrupts the economic activities within Florida, the repercussions are felt, not only by producers and consumers, but also by local government. This presents a major challenge to policy makers, because they would be hard-pressed to come up with the resources needed to boost consumption and production.”

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