Political Economy and Natural Hazards Mitigation: State Incentives for Tornado Shelters

Hurricane Katrina has spurred public choice economists’ interest in the political economy of natural hazards. We provide a case study in the political economy of hazards mitigation from tornado shelters in Oklahoma. We analyze the determinants of support for a referendum for a tax exemption for tornado shelters, and then the number of shelters enrolled for the exemption. Generally the determinants of support for the referendum are consistent with the determinants of subsequent shelter installation. Particularly, greater tornado risk increase both support for the referendum and installation, which suggests that individuals do not ignore a low probability natural hazard risk either as voters or consumers.