Estimating the Economic Damage of Hurricanes Katrina and Rita on Commercial and Recreational Fishing Industries
Creators: name: Caffey, Rex H.
name: Kazmierczak, Richard F.
name: Diop, Hamady
name: Keithly, Walter R.
name: Caffey, Rex H.
name: Kazmierczak, Richard F.
name: Diop, Hamady
name: Keithly, Walter R.
Publisher: name: Unknown
Year: 2007
Subjects: Agribusiness
Resource /Energy Economics and Policy

description: A USGS analysis of land change data from satellite imagery and field observation indicated that 217 square miles of Louisiana's coastal wetlands were converted to open water because of Hurricanes Katrina and Rita. Because of their physical location and marine-dependence, commercial and recreational fishing sectors in Louisiana received a disproportional economic impact from the hurricanes of 2005. Storm surge modeling was accomplished using the ADCIRC model with data generated by the National Weather Service on storm trajectory and storm magnitude and detailed data on coastal bathymetry and elevation. In our application of the ADCIRC model, a grid composed of 1 square-mile cells (and encompassing the entire coastal management zone) was used within a GIS context to predict peak storm surge water heights at every known fixed fishing infrastructure location (dealers, processors, marinas, etc.) in Louisiana. We then collected primary data from a sample of these locations that was used in estimating, among other things, the percent of infrastructure that was lost due to the storms and the dollar amount of that damage for each location. These two pieces of information were then used to statistically estimate a geographically specific surge height damage function that was subsequently applied to all (non-sample) infrastructure sites in coastal Louisiana, thereby allowing the calculation of aggregate storm impacts. Developing an estimate of direct damages to the commercial and recreational fleet required two distinct pieces of information - an accounting of the number of vessels lost or damaged during the storms, and a measure of the market value of each of the lost vessels. Given that no comprehensive listing of lost or damaged vessels was compiled post-storm, the loss of vessels was estimated by comparing the presence of vessels in trip-ticket data during the 8 month period following the storms with the same period from the previous year. A vessel that was absent in the post-storm period was assumed lost, and valued by its physical characteristics by employing a price regression estimated using data collected from the major commercial used-vessel marketing trade publications and websites. The loss of recreational vessels was similarly estimated using market-based price data from non-commercial marketing publications and state-maintained databases of recreational vessels and their characteristics. Loss estimates were developed separately for each of the 4 coastal management zones in Louisiana and then aggregated. In aggregate, dealers were estimated to have incurred $103,522,186 in losses due to the storms while processors across the coast were estimated to have experienced $63,836,142 in losses, for a total of $167,358,328. For comparison purposes, these losses are approximately 29 percent of the total annual revenue generated by the dealers and processors in Louisiana. Estimated commercial fleet losses amounted to $153,817,470, while the estimated total recreational fleet loss was estimated to be $224,004,486. Regional variations in losses were also examined and linked to specific storm characteristics. Interestingly, the sum of these loss estimates fall near the mid-point of the range of loss estimates generated by various rapid assessments in the weeks following the storms, suggesting that rapid assessment methods (at least in aggregate) may not be as subjective as they first appear.