Alejandra Breve Ferrari | 6/9/2017 4:25:09 PM
Coastal communities, businesses, farmers, fisheries and local governments across Louisiana have struggled to recover financially from recent hurricanes and other natural disasters. The Public Assistance Grant Program administered by the Federal Emergency Management Agency (FEMA) is available for states and communities that have received a major or emergency disaster declaration. This is only approved after FEMA evaluates the request and recommends action to the White House based on the disaster, the local community and the state's ability to recover. In some instances, the costs taken may exceed the minimum federal threshold of damages required for federal financial assistance, but the opposite could also be the case. After the most recent devastating tornadoes in 2017, the state of Louisiana didn’t meet with the state threshold and, therefore, couldn’t receive public assistance.
Two of the initial and most important aspects of disaster response and recovery operations are the removal and disposal of debris from the disaster-affected area. This study assesses local governments’ debris removal management decisions and how they impact their net wealth in the long run by using local government financial data from audited financial statements and post-disaster data gathered from the Louisiana Public Assistance database.
Preliminary statistical results suggest that the storm and parish characteristics significantly affect the local government’s debris management decision after federally declared disasters. Parishes are more likely to hire a third party to process and dispose of debris after more severe storms. It can be possible that the debris accumulated is beyond the capacity of the parish for some disaster events. In more extreme cases, the storms could also take a toll on the local government’s labor and equipment assets, limiting their ability to clean up themselves. Parishes with a higher index of community involvement, referred to as social capital (number of associations, voter turnout, census response rate and number of nonprofit organizations), were shown to reduce the use of debris removal contracts. These results were then incorporated in a computer program model, System Dynamics, in the context of assumptions about future storm characteristics (frequency and severity), price of outsourcing and self-procurement of debris removal operations as well as the current capital and debt financial accounts of a rural parish government in Louisiana.
System Dynamics models all relationships that take place in a system and how specific relationships affect the system over time. Once the model is constructed and all relationships are established, the simulation can be applied over a specific length of time. After running the model scenarios over 10-year windows, it was easy to see how present interactions affect overall net wealth in the future.
The public wealth of the local government can be shocked with various debris management policy scenarios. Understanding the implications of recovery and response policy, specifically when facing constraints such as a lack of federal assistance funding, should help local governments become more resilient as they face a future of uncertainty. System Dynamics modeling visualizes all of the tentative effects of different activities that take place in a complex financial system as it is shocked by a disaster.
Alejandra Brevé Ferrari is a doctoral student in the Department Agricultural Economics and Agribusiness.
Alejandra Brevé Ferrari, doctoral student in the Department of Agricultural Economics and Agribusiness, studies statistical models to help predict the consequences of natural disasters to rural communities. Photo by Tobie Blanchard