Panel: Household Finance after Local Disasters
(Natural Resource, Energy, and Environmental Policy)

Thursday, November 7, 2019: 10:15 AM-11:45 AM
Plaza Building: Lobby Level, Director's Row I (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Organizer:  Nathan Blascak, Federal Reserve Bank of Philadelphia
Panel Chair:  John Lynch, University of Colorado, Boulder
Discussants:  David Keiser, Iowa State University and Tess Scharlemann, Federal Reserve Board

This session includes four papers that examine how lending and borrowing responds to local disasters. The two first studies in the panel examine how consumers and lending institutions responded to specific disasters: the Flint water crisis in 2014 and Hurricane Harvey in Houston in 2017. The two others look more broadly at the effect of disaster assistance programs on the financial health of consumers and local businesses. The primary goal of the session is to provide empirically grounded insights into how borrowers and lenders respond to disasters, which has important policy implications for the design of government disaster-relief and prevention programs. In particular, each paper in the session identifies, to some extent, financial winners and losers following disasters and the role of pre-disaster factors -- such as income, credit quality, and/or minority status – in predicting outcomes. Session attendees will better understand the total costs incurred by victims of disasters, the extent to which current relief programs help and/or exacerbate pre-existing inequalities, and the extent to which under-insurance for disasters can be explained by moral hazard issues. In the current context of rising income inequality and increasing disaster severity, this session will shine a light on a topic that has been dramatically under-researched until now.

Thirsty for Credit: Mortgage Lending during the Flint Water Crisis
Nathan Blascak, Federal Reserve Bank of Philadelphia and Emily A. Gallagher, University of Colorado, Boulder

Let the Rich be Flooded: The Unequal Impact of Hurricane Harvey on Household Debt
Emily A. Gallagher1, Stephen Billings1 and Lowell R. Ricketts2, (1)University of Colorado, Boulder, (2)Federal Reserve Bank of St. Louis

Federal Disaster Loans: Lending As Disaster Assistance to Households
Cameron Ellis and Benjamin Collier, Temple University

Weathering an Unexpected Financial Shock: The Role of Cash Grants on Household Finance and Business Growth Following a Natural Disaster
Justin Gallagher, Montana State University, Daniel A. Hartley, Federal Reserve Bank of Chicago and Shawn Rohlin, Kent State University