Economic Value of Hurricane Forecasts: An Overview and Research Needs

Abstract

Hurricane forecasting is in part an economic problem, because it commits scarce resources to save lives, reduce injuries, and lessen economic impacts. New sensing, recording, and reporting technologies, as well as the increased number of clients and their changing needs, have heightened the need to economically justify the hurricane warning system. Estimating forecast value can help show if improved forecast provision and dissemination would offer more benefit to society than alternative public investments such as infrastructure or forecasts of other hazards. We review research that has estimated the economic value of the hurricane forecast and warning system and the value of improving forecast quality. We recommend developing a comprehensive theoretical understanding of economic value of hurricane forecasts to diverse stakeholders across all time scales. This improved, basic understanding would involve a more in-depth discussion of the value of information as well as a broader knowledge of actual (or created) distinctions between adaptation, mitigation, and response to hurricane risks.