Economic analysis of the tornado impact upon two communities

The aftermath of hurricane landfalls like Katrina and Rita in 2005 and the tornadoes of Moore, Oklahoma (1999) and Greensburg, Kansas (2007), remind us of not only the power such systems can contain but of the great human loss, social and emotional effects, economic loss, substantial infrastructural damage, and political and environmental impacts such storms carry with them. Although the number of people killed by all disasters has been generally decreasing due to better warning dissemination, the number of people affected by disasters and costs incurred by them remains high and continues to increase.
Tornado damage does produce a negative effect on some business operations; however, direct damage is only one of several factors that contribute to business loss. Damage and disruption of utilities, transportation, reduced traffic, and reduced employee productivity can all additionally incur loss that may be as large as physical losses. Research on the short-term and long-term economic effects after a tornadic event is sparse, especially for small to mid-size communities. These communities often lack the political and economic influence of larger cities when it comes to preparing and recovering from an event. Although large metropolitans may have more population at risk, large urban areas often have the resources, training, and funds to deal with hazards and disasters.

This study fills a void in the literature by focusing on the impact placed on two relatively small communities of Clovis, New Mexico and Tulia, Texas after tornadoes hit on March 23, 2007 and April 21, 2007 respectively. Over 450 residential structures and 33 businesses were damaged in Clovis. In Tulia, the business district took the brunt of the storm, completely destroying 24 businesses in the town with a population of 5100. This study sets a framework for future study and focuses on the collection, compilation and documentation of engineering, atmospheric, and economic data with implications for a rapid response economic impact analysis using primary data directly from impacted businesses, higher reliability data than traditional regional studies. Such analysis provides for more accurate economic estimates that would be available to federal and state officials who decide whether to issue a Presidential Declaration and the amount of funds to disperse to a community suffering from a disastrous event based on numbers reported to the state. It is important that these smaller jurisdictions properly account for all impacts since economic impacts may be larger than direct damage impacts and may be the difference in obtaining declaration status. Additionally, local officials will be able to determine where to exert these funds in a way that would be more economically feasible and towards effective mitigation planning, paving the way towards a faster recovery and leading towards greater local sustainability.

Results of the study indicated that infrastructure such as power or water services did not play a role in business disruption as power was restored quickly in both cases. The people in the community came together along with many others from surrounding communities to help in the cleanup process. Debris was cleared within the week. Those businesses that sustained major damage not only to the structure but inventory as well, took longer to recover, between two to nine months. Additionally, permanent job loss impacts estimated by the economic impact analysis show significant immediate impact to Swisher County, spiking unemployment by nearly 36% and a loss of 22 jobs. Swisher County had an estimated $1,000,000 in output impact due to the decision of Alco not to rebuild. Additionally, research showed that when businesses are hit by a tornado, some experienced demand surge. This included auto repair shops and service firms such as insurance agents. Others continued to operate or recovered quickly by changing locations or operating out of their homes. However, establishments in sectors such as manufacturing/dairy/retail sustained longer lasting periods of business interruption.