Natural disaster risks: An introduction

Hurricane Katrina generated the largest losses of any natural disaster in the history of the United States. The hurricane hit Florida on August 25, 2005 and Louisiana on August 29. Despite having been downgraded from a Category 4 to a Category 3 hurricane, the storm inflicted unprecedented losses. This special issue of the Journal of Risk and Uncertainty deals with the implications of catastrophic events for research on risk and uncertainty. What are the consequences of natural disasters? How do individuals and firms respond to such disasters? How do insurers respond, and how should the government respond? Several of these papers will have a strong normative component as they will suggest what actions individuals, firms, and the government should take in anticipation of natural disasters. The special issue will consist of three parts. The first overview section consists of this introduction, as well as the results of a national survey of disaster risk beliefs and the public’s attitudes toward relief efforts. The second part will focus on how people respond to disasters, both in terms of individual housing decisions and insurance company behavior. The third group of papers is more policy-oriented, as it addresses the various policy pitfalls that arise with respect to natural disasters as well as possible strategies for coping with the enormous losses that follow a catastrophic event. The reason for the salience of catastrophic events is that the losses are huge, often unexpected, and not entirely exogenously determined. The magnitude of loss is influenced to a substantial degree by individuals’ exposure to the hazard, the level of personal selfprotective behavior, and government policy. Hurricane Katrina led to $45 billion in insured losses.1 Among Louisianans only, it also had an estimated death toll of 1,577 residents and