Association for Public Policy Analysis & Management

In the policy community, there continues to be a great deal of interest in developing strategies for local economies to effectively and efficiently prepare for and recover from economic disruptions. Such strategies depend upon an understanding of some of the factors that influence local decisions. Unfortunately, much of the existing research on resilience and disasters focuses on outcomes or decision making subsequent to a particular catastrophic event. Given the increasing prevalence of catastrophic events and the responsibility of decision makers to prepare for them, we extend the current research in this field by examining resilience decision making in the context of potential exposure to repeated catastrophic events. The existing studies relying on primary data collected in repeated event contexts are limited in scope and often confounded by exogeneity associated with the disaster context, making measurement of specific resilience actions and policies difficult.

Alternatively, by utilizing controlled experiments, our research design overcomes many of the limitations in the extant literature, thus improving the reliability of our data and helping to more accurately inform public policy in the context of repeated catastrophic events. Using two robust subject pools consisting of 428 professional managers in middle market private firms and 727 students from our university’s undergraduate research pool, we conduct a comprehensive series of controlled online experiments with a 100 percent response and completion rate. The experiments expose subjects to a common resilience decision, investing in inventories of critical inputs. Subjects make the resilience investment decision in repeated events over the course of the experiment. Our treatment groups allow us to explore the role of decision making in the context of repeated events where resilience advice is provided to the subjects, similar to advice provided by policymakers such as the Department of Homeland Security (DHS) or technical experts. Our treatment groups also enable us to evaluate the relative influence of resilience information when provided in the context of gender diversity.

The experimental results provide important insights for emergency planners and policymakers more broadly. While we find that repeated exposure to catastrophic events induces significantly higher levels of resilience investment, and while this alone is not a departure from the prevailing literature, we find that decision makers who are advised to invest in resilience do so at a significant rate. We also find that subjects overwhelmingly forego resilience investments immediately after exposure, suggesting that subjects make decisions ignoring the relative independence of events—thinking lightning will not strike the same place twice. Overall, we find that advice to invest in resilience has the same effect as prior exposure to more than five catastrophic events, indicating the high degree of influence of resilience information when provided and the overall importance of policy advice from experts and policymakers.

Keywords: Resilience; Emergency Management; Experiments; Decision Analysis; Natural Hazards; Terrorism