by R. Selin Dilmener

Abstract 

On August 29th, 2005, New Orleans was hit with one of the most damaging hurricanes in the history of the United States. Even before the storm, the Federal Emergency Management Agency (FEMA) listed a hurricane strike in New Orleans as one of the most ruinous threats to the nation. Despite these warnings and the mandatory evacuation orders, more than 70,000 citizens chose not to evacuate the city prior to the storm. Previous literature focuses on income, frequency of exposure to hurricanes and credibility issues to explain the unwillingness of individuals to evacuate (Baker, 1991; Gladwin & Peacock, 1997; Lindell and Perry, 1992). In this paper, I propose a theory of evacuation based on individuals’ property related concerns. During a hurricane strike, it is especially difficult to maintain law and order. Thus an individual might decide to put his life at risk in order to protect his property; causing coordination problems. I model evacuation decisions as a noncooperative game and examine its Nash equilibrium. I find that as property-related concerns increase, probability of evacuation decreases. I further find that as the number of residents increase in the city, probability of evacuation decreases. This paper provides the policy makers with the tools to determine welfare associated with mandatory vs. voluntary evacuation orders and the groundwork to lay out guidelines to follow prior to making any type of evacuation decision.

Professor Huseyin Yildirim, Faculty Advisor

JEL Codes: C6,

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