Localized commercial effects from natural disasters: The case of Hurricane Sandy and New York City

This paper considers the localized economic impacts of a climate-related storm, Hurricane Sandy. Controlling for exposure to pre-storm risk, we exploit variation in post-storm inundation to identify the impact of storm-induced flooding on establishment survival, employment, and sales revenues. Results indicate that there were economic losses from Sandy and, as expected, they were concentrated among retail businesses with more localized consumer bases. After Sandy, retail establishments exposed to higher surge levels experienced 11 percentage point higher closure rates and 9 percent larger sales revenue declines compared to establishments with less exposure to inundation. In addition, closures were concentrated among standalone establishments. These losses appear to be fairly persistent, showing no sign of recovery to pre-storm levels by 2016. The evidence for jobs is more tentative—at most, they exacerbated an existing downward trend for retail establishments after Sandy.