The Demand and Supply for Post-Katrina Disaster Aid: A Triple-Hurdle Model of SBA Disaster Loans for Small Businesses in Mississippi

Anna Josephson and Maria Marshall

No 170177, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: Following Hurricane Katrina, the United States government provided $45 billion in loans and rebuilding funds to individuals and businesses for the purpose of repairing the damage caused by the hurricane. However, it is not yet clear what impact this assistance had on small businesses in affected areas. In particular, the role of Small Business Administration (SBA) loans has yet to be fully examined. Though few doubt the benefits of short-term and immediate disaster relief, there is some debate on the benefits of SBA loans. Evidence suggests that receiving business loans may do more harm than good, if the loan ultimately increases debt load. In this study we contribute to the disaster relief literature through completing the first analysis regarding the receipt of SBA loans after Hurricane Katrina. We find that there are several characteristics which increase the probability of application for a loan, but a set of different characteristics which determine the amount ultimately received. Further, results indicate that targeting programs for certain groups such as women or minorities were unsuccessful in directing loans to these groups.

Keywords: Community/Rural/Urban Development; Demand and Price Analysis; Public Economics; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 24
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170177

DOI: 10.22004/ag.econ.170177

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