Going home: evacuation-migration decisions of hurricane Katrina survivors.

1. Introduction

Upward of one million residents of the greater metropolitan New Orleans area evacuated on 27 and 28 August 2005, just before Hurricane Katrina struck the Gulf Coast. Evacuees from other parts of Louisiana, Mississippi, and Alabama fled the coast in large numbers, marking Hurricane Katrina as the largest population displacement in the United States since the Dust Bowl of the 1930s (Falk, Hunt, and Hunt 2006). Postdisaster recovery and rebuilding in the Gulf region requires understanding the existing risks, communicating those risks to the public, rethinking land use, deciding on methods to correct deficiencies in public infrastructure, and providing incentives for economic recovery that will give firms and households an opportunity to survive and thrive. In the case of New Orleans, recovery could take up to 11 years or more (Kates et al. 2006). Although many issues remain to be resolved in determining what will become of New Orleans and the Gulf region, the economic, social, and cultural future of the Gulf region will be significantly influenced by who decides to return. In the face of variable but widespread destruction, salient vulnerability, and uncertain prospects, evacuees must choose whether to return to their homes.

As Katrina approached, Alabama, Mississippi, and Louisiana all issued mandatory evacuation orders. In New Orleans, 70,000 people remained, some by choice, but most without means of escape (U.S. Congress 2006b). Many evacuees who sought refuge from Katrina had nowhere to return to after the storm. Immediately after the storm, roughly 275,000 people were forced into group shelters (FEMA 2006a). Between mid-August and mid-November 2005, 250,000 people lost their jobs (U.S. Congress 2006a). Without homes or jobs, many people were forced to decide whether to restock and rebuild their lives along the Gulf coast or to seek out a new location for residence. The National Hurricane Service estimated the total damage losses from Katrina at $81.2 billion (NWS 2006). In the 117 hurricane-affected counties of the Gulf Coast, 40 declined in population between July 1, 2005, and January 1, 2006 (Frey and Singer 2006). The greatest population losses occurred in the parishes and counties holding New Orleans, Louisiana; Gulfport-Biloxi, Mississippi; Lake Charles, Louisiana; Pascagoula, Mississippi; and Mobile, Alabama.

In this paper, we examine the decision to return to the postdisaster Gulf region which we call the "return migration" decision. We review economic models of household migration and build on historical and empirical evidence of migration behavior to postulate on determinants of postdisaster return migration. We identify important research questions that can be examined with return migration data. We explore stated preferred return migration behavior using a number of data sets collected in the wake of Hurricane Katrina and make some inferences about socioeconomic determinants and effects of the return migration decision.

2. Economic Models of Household Migration

Economists have long recognized that economic factors influence the migration patterns of households. Sjaastad (1962) provides a theoretical framework for the decision to migrate, defining the problem in terms of a household's search to maximize the net economic return on human capital. In this framework, migration is viewed as an equilibrating force in the labor market--real wage differences between regions or cities create arbitrage opportunities that can be realized by migration, leading to a redistribution of households across the landscape. Early models focused on interspatial wage differentials, distance between origin and destination, labor market conditions (such as unemployment rate and growth in employment), and household characteristics as factors determining migration flows (Greenwood 1975; Graves 1979, 1980; Greenwood and Hunt 1989).

Models of household migration typically employ a modified gravity modeling structure. Migration flows are assumed to be proportional to origin and destination populations, but inversely related to distance. It has been well documented that migration rates decline with distance, although it is generally believed that out-of-pocket monetary expenses could not alone explain this phenomenon. Moving expenses tend to be a relatively small part of the net returns to migrating. Other explanations include opportunity costs of time, psychic costs of moving (diminution of contact with family and friends, change of environment, etc.), higher search costs associated with greater distances, and uncertainty about destinations (Greenwood 1997). The existence of these potential barriers to migration has created concern about the efficacy of migration in reallocating resources in response to changing market and demographic conditions.

Migration decisions vary across individual households. Economic factors such as worker skills and employment status will influence returns to migration. Life cycle considerations and the availability of information could also influence migration. One would expect some correspondence between migration and changes in life stages--for example, children moving away from home, the completion of school by a family member, marriage, divorce, retirement, etc. Expectations of obtaining gainful employment depend on flow of information of employment opportunities, which might explain why previous-period net migration rates are positively correlated with current migration trends (Greenwood 1969). Social networks could play a role in learning about labor market opportunities and providing support for migration. Especially among race-ethnic minority groups, research suggests that migration patterns tend to follow well-worn pathways and networks (Bean and Tienda 1987; Farley and Allen 1987; Barringer, Gardner, and Levin 1993).

Individuals might also be influenced through learning about amenities in different locations. Sjaastad (1962) considered location-specific amenities (including climate, smog, and congestion) as factors that might affect returns to migration, but characterized them as unimportant in evaluating migration as a redistributive mechanism because they entail no resource cost. This notion does suggest, however, that location-specific amenities might affect the reservation wage of households and, thus, that wage schedules could be conditional on amenity levels. A subsequent branch of literature adopted this perspective, assuming that wages, rents, and the prices of locally produced nontraded goods adjust in response to location-specific exogenous factors, such as local environmental conditions or fiscal considerations, so that utility and profit levels (rather than wages and land rents) are equalized across regions. Under this characterization, persistent differences in wages and rents compensate for amenity levels; they need not equalize across regions or cities in the long run unless the locations have identical amenities.

Roback (1982) shows how wages and land rents are simultaneously determined in an equilibrium setting, conditional on the level of local amenities. In this context, amenities are nonmanufactured attributes that are valued by households--such as temperature, rainfall, and cleanliness of environment--or goods and services that vary in availability spatially--such as professional sports teams, performing arts, cultural resources (i.e., museums), etc. In Roback's model, interregional wages and rent differentials can persist and will reflect the value of location-specific amenities. This formulation of household migration follows the hedonic model formalized by Rosen (1974), in the sense that implicit values of location-specific amenities are reflected in the markets for labor, land, and other locally produced goods and services.

Clark and Cosgrove (1991) examined the persistency of interregional wage differentials. They found evidence that supports both the human capital approach of Sjaastad and the compensating differentials model of Roback. Amenities tend to have a significant negative effect on wages, but wage differentials persist across regions, even when amenities are controlled. Greenwood et al. (1991) provide evidence of disequilibrium in U.S. internal migration between states--real income in amenity-rich states tends to be too high and real income in amenity-poor areas tends to be too low.

Frey and Liaw (2005) identify cultural constraints--such as the need for social support networks, kinship ties, and access to informal employment opportunities--as shaping the migration patterns of race-ethnicity groups. Empirical evidence suggests that minority residence in an ethnically concentrated metropolitan area can inhibit out-migration (Tienda and Wilson 1992). Thus, persistent differentials could reflect cultural constraints in a number of ways: race-ethnic groups might traverse well-worn migration routes with less attention paid to wage differentials at other possible destinations, or connections to place (1) might inhibit out-migration. The implications of this line of reasoning are that migration might not engender complete efficiency in the allocation of labor across space because social and personal constraints could inhibit labor flow. Greenwood et al. (1991) suggest that persistent wage differentials are relatively small, so that efficiency loss could be minor. However, exploration and inference about social connections is something that, to our knowledge, has not been explored. Such an analysis is best pursued with microlevel data.

3. Examining Return Migration