Navigating Disaster: An Empirical Study of Federal Assistance Following Hurricane Sandy Laura E. Grube a , Rosemarie Fike b and Virgil Henry Storr c a Department of Economics, Beloit College, 700 College Street, Beloit, WI 53511, USA. E-mail: grubel@beloit.edu b Department of Economics, Texas Christian University, 2855 Main Drive, Fort Worth, TX 76109, USA. c Department of Economics, George Mason University, 4400 University Drive, Fairfax, VA 22030, USA. Federal disaster assistance should only compensate disaster victims for the damage sustained. Using zip code-level data on federal disaster assistance, this paper examines the FEMA Individuals and Households Program following Hurricane Sandy. We show that the extent of the damage does appear to explain much of the differences in the size of the federal disaster award that individuals receive. However, other factors, including percentage of foreign-born and the educational attainment levels of individuals in a community, also explain damage assessments and assistance levels. We argue that complexities in the application process may have disadvantaged foreign-born and less educated applicants. Eastern Economic Journal (2017). doi:10.1057/s41302-017-0098-x Keywords: Hurricane Sandy; disaster assistance; FEMA; vulnerable populations JEL: H5; Z1 INTRODUCTION Hurricane Sandy plowed into the East Coast on October 29, 2012, with 80-mph winds and a storm surge of over nine feet. Although the storm was downgraded from a hurricane to post- tropical cyclone before hitting the coast, it caused significant damage to New Jersey, New York, and Maryland and is the second costliest natural disaster in US history (after Hurricane Katrina). Estimates of total economic loss ranged from $30 billion to $50 billion. In January 2013, the Disaster Relief Appropriations Act, focused primarily on Hurricane Sandy relief, was signed into law (P.L. 113-2). The Federal Emergency Management Agency (FEMA) Disaster Relief Fund (DRF), which supports public assistance (e.g., public buildings, roads, and public utilities) and individual assistance, received $11.49 billion. As of March 2016, however, cumulative obligations for Hurricane Sandy through the DRF were $15.75 billion, with $11.6 billion for public assistance and $1.6 billion for individual assistance. The Robert T. Stafford Disaster Relief and Emergency Assistance Act (hereafter, Stafford Act), enacted in 1974, establishes federal assistance following natural disasters. The Federal Emergency Management Agency (hereafter, FEMA) was created 5 years later. Since the passage of the Stafford Act and creation of FEMA, the number of disaster declarations and amount of federal disaster spending has been increasing. From 1989 to 2004, total Disaster Relief Fund (DRF) spending exceeded $5 billion twice (1992 total DRF was $5.3 billion; in 2002 total DRF was $8.7 billion). In 2005, the year of Hurricane Katrina, total DRF spending was $39.8 billion. From 2006 to 2013, total DRF spending was only below $5 billion twice (2007 total DRF was $4.8 billion; in 2011 total DRF was $2 billion). The average total DRF spending from 2006 to 2013 was $6.7 billion. Eastern Economic Journal, Ó 2017 EEA 0094-5056/17 www.palgrave.com/journals