Short-Run Economic Impacts of Hurricane Katrina (and Rita)

A tropical depression formed over the southeastern Bahamas on August 23 rd , 2005, moved toward the Gulf of Mexico, and strengthened to Category 5 on the Saffir-Simpson Hurricane Scale over the central Gulf of Mexico (NCDC, 2005). When Hurricane Katrina made landfall on the Louisiana coast with Category 3 intensity on August 29 th , 2005, 130mph of sustained winds breached the levees of New Orleans, and caused substantial inundation. A flood following the storm, devastated the Crescent City, and the disaster was recorded as the costliest natural disaster ever in U.S. history, resulting in a 80 percent flood in the City of New Orleans and over 1,800 casualties (Louisiana Geographic Information Center, 2005).