Learning from the storm: The impact of hurricane experience on future disaster preparedness

Hurricanes and tropical cyclones have become more severe over the past 40 years and are expected to intensify in the future due to climate change. In this paper, we seek to understand how natural disaster experiences shape precautionary economic behaviors in response to future risks. We combine daily, household-level consumer goods purchase data from 2008-2018 with hurricane hit and warning data and use propensity score trimming to obtain a sample of households with a similar probability of receiving a hurricane warning to mitigate the problem of endogenous residential sorting. Using a triple difference-in-differences model, we find that past hurricane experience significantly influences household preparedness for impending storms. While households without prior-year hurricane exposure tend to stock up on emergency supplies only after receiving warnings, experienced households prepare earlier, increasing their purchases up to a week before warnings and prioritizing essential items. The degree of preparedness varies based on the severity of past disasters, household income, and the disaster risk level of the area.