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What is the impact and value of hurricane forecasts? We study
this question using the universe of landfalling US hurricanes between
2005–2022. We find that forecasts drive adaptive protective
expenditures, and that erroneous underforecasts result in a significant
increase in total hurricane damage. Using a theoreticallygrounded
approach for estimating the marginal value of forecast
improvements, we find that improvements since 2007, after the implementation
of a national policy to improve hurricane forecasts,
have reduced total costs by 19%, averaging $2 billion per hurricane.
These benefits far exceed the annual budget of the policy and of all
federal weather forecasting.
