To my friends and family in New York City, I suggest you listen to the Doors' Riders on the Storm. As the Big Storm approaches the Northeast, how much damage will it cause? The NY Times discusses the ex-ante precautions that have been taken. Government has provided 3 day ahead forecasts of the extent of the possible flooding and has encouraged households to migrate to higher ground and prepare for worse case scenarios. Government is shutting down at risk public transportation. So note that both private and public self protection investments are taking place. This is adaptation! While Monday will be a nasty day for the region, will long run damage take place?
As a social scientist, I view this unfortunate Monday as an important field experiment as we learn how to take a punch from Mother Nature. Are the doom and gloomers right that we can't take a punch? As we learn from Monday's experience, will future shocks cause even less damage? We are always rebuilding our cities and infrastructure, how should we build the next round of such sunk capital to reduce future climate change risk? This is adaptation! Forward looking individuals have an incentive to incorporate their best guesses of the future (i.e expectations) when choosing their investments in where to live and how to live.
