The Impact of Atlantic Hurricanes on Business Activity

Sumit Agarwal, Smarajit Paul Choudhury, Mingxuan Fan and Leora Klapper

No 11217, Policy Research Working Paper Series from The World Bank

Abstract: This paper quantifies the short-run economic impact of 21 Atlantic hurricanes on U.S. local business activity from 2017 to 2024 using anonymized Mastercard transaction data aggregated by ZIP code. On average, hurricanes reduce merchant sales by 12.4 percent during the preparation, impact, and recovery phases—an estimated US$1.38 billion in lost revenue per storm. Substitution in spending across nearby areas or large online platforms is limited, indicating widespread local consumption declines. Economic disruption varies more by industry than storm intensity, with independent stores hit harder than chains. Local businesses with larger online presence face smaller, shorter sales declines, showing greater resilience.

Date: 2025-09-22
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