The Economics of Tropical Cyclone Adaptation

Abstract

As tropical cyclones continue to devastate societies with their power and destruction, adaptation remains a cornerstone of public and private mitigation decisions. This chapter reviews key themes in the economics of tropical cyclone adaptation. The chapter begins with a review of the economic theory of both private and public adaptation with focus on decision insights from both rational choice theory and behavioral economics. The chapter then surveys themes and findings the empirical literature, including behavioral insights and public versus private adaptation, and includes real world examples of adaptation measures, strategies, and programs from around the world. The chapter concludes with research frontiers and key open questions for future research. As tropical cyclone losses are expected to grow significantly in the coming century due to both climate and socioeconomic change, understanding adaptation will continue to be key to mitigating losses and building more resilient communities for years to come.