Calculating the cost of damage to the US state of Puerto Rico is not an easy task, according to a Virginia Tech expert.
“The size and complexity of disasters affect how long it takes to assess the impact of disasters, and hurricanes are particularly time-consuming. For example, it takes longer to determine the effects of wind and water damage on property than it does when a snowstorm damages cars,” says the Virginia Tech College of Science. Collegiate Assistant Professor Jadrian Wooten said.
After Hurricane Fiona, Puerto Rico left 1.5 million people without power and thousands of people without water, government officials will soon assess the damage. Puerto Rico officials described the damage as “catastrophic.”
The cost of rebuilding hurricane-damaged areas is seen as a positive investment in economies. Not according to Wooten. “Those people will be victims of the broken window. It is an easy trap to fall into because it is mostly an optimistic view of a negative event. The example of the broken window was introduced by Frédéric Bastiat in his essay ‘What we see and what we do not see’. The argument is that destruction is good for the economy because money spent on repairs generates new production.
Wooten continues, “Bastiat, however, points out that the money spent on repairing destroyed property is not “destroyed.” Replacement Something lost and not going to create More Price. The money spent after a natural disaster can increase the domestic product, but it does not increase the wealth of the country. If all the original infrastructure had survived, the additional money could have been used to create it. More Or better than For the service of the local people.”
Wooten added that this build-destroy-rebuild burden is especially heavy for areas prone to multiple natural disasters, such as Puerto Rico, which experienced Hurricane Maria in 2017 and a 6.4 earthquake in 2020.
Jadrian Wooten is a college associate professor in the Department of Economics at Virginia Tech and author of Parks and Recreation and Economics. Read more about Wooten’s recovery from Storm Fiona and the devastating and unknown costs in Monday’s Morning Economist newspaper.
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