Wide Variations in Hurricane Maria Damage Estimates in Puerto Rico
A review of several estimates measuring the costs of the damage that Hurricane Maria wrought on Puerto Rico when it slammed the island on Sept. 20 reveals wide variations from a high of $95 billion by Moody’s Analytics to a low of $15.9 billion by Estudios Técnicos (ET).
“While it remains too early for us to provide a damage assessment, a preliminary report from Moody’s Analytics suggested it could be approximately $95 billion, which is roughly 150% of Puerto Rico’s annual GNP [gross national product],” said the island’s Financial Oversight Management Board (FOMB) in a letter to Congress dated Oct. 3. “[T]he FOMB urges Congress to heed the Governor’s calls for the maximum federal assistance to Puerto Rico in order to help it respond to and recover from Hurricanes Irma and Maria.”
The $95 billion mark includes “lost output” and infrastructure damages.
According to a preliminary Oct. 1 report to the Puerto Rico Manufacturers Association, ET estimates total damages from Maria at between $15.9 billion to $19.9 billion. Infrastructure damages range from $14.9 billion to $18.6 billion, while economic damages range from $1 billion to $1.3 billion.
Chuck Watson, an analyst with the disaster research group Enki Research, puts total damages at $30 billion, which includes $20 billion in physical damages and $10 billion in lost economic productivity, according to cnn.money.
Meanwhile, AIR Worldwide, a catastrophe modeling firm, “estimates industry insured losses for Hurricane Maria in the Caribbean will be between $40 billion and $85 billion. Puerto Rico alone accounts for more than 85% of the loss,” noting that hurricanes Irma and Maria have been major catastrophes for the Caribbean.
An analysis of the numbers for Maria show discrepancies in the area of economic damages.
Estudios Técnicos’ numbers for infrastructure damage and economic damages, which measures the relationship between the two, are at 14 to 1. Watson’s numbers put the ratio at 2 to 1. Watson’s numbers are similar to a 1999 Planning Board report on Hurricane Georges, which hit the island in 1998. That Planning Board report put total damages at $4.3 billion, including $2.85 billion in infrastructure damages and $1.4 billion in economic damages. Therefore, this ratio is also at 2 to 1.
Based on this analysis, Estudios Técnicos’ ratio seems to be very low.
Moreover, Estudios Técnicos’ high end estimate for economic damages from Maria ($1.3 billion) is lower than the Planning Board’s number of $1.4 billion for Georges. Given the widespread destruction that Maria has wreaked on Puerto Rico, $1.3 billion in economic damages also seems to be very low.