TY - JOUR
T1 - Accounting for natural disasters
T2 - The impact of earthquake risk on California municipal bond pricing
AU - Fowles, Jacob
AU - Liu, Gao
AU - Mamaril, Cezar Brian
PY - 2009
Y1 - 2009
N2 - While Katrina has raised awareness of the potential impact of hurricanes on municipalities along the Gulf Coast, it remains unclear if the municipal bond market considers other types of natural disaster risk in other areas. We attempt to fill this gap by conducting an analysis to determine if underlying geologic earthquake risk affects interest costs for municipal bond issuers in California. We find that earthquake risk does matter in determining the interest costs for municipalities issuing debt, but not universally - only for municipal bonds issued after Hurricane Katrina and only in relation to underlying geologic earthquake risk.
AB - While Katrina has raised awareness of the potential impact of hurricanes on municipalities along the Gulf Coast, it remains unclear if the municipal bond market considers other types of natural disaster risk in other areas. We attempt to fill this gap by conducting an analysis to determine if underlying geologic earthquake risk affects interest costs for municipal bond issuers in California. We find that earthquake risk does matter in determining the interest costs for municipalities issuing debt, but not universally - only for municipal bonds issued after Hurricane Katrina and only in relation to underlying geologic earthquake risk.
UR - http://www.scopus.com/inward/record.url?scp=62349125334&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=62349125334&partnerID=8YFLogxK
U2 - 10.1111/j.1540-5850.2009.00924.x
DO - 10.1111/j.1540-5850.2009.00924.x
M3 - Article
AN - SCOPUS:62349125334
SN - 0275-1100
VL - 29
SP - 68
EP - 83
JO - Public Budgeting and Finance
JF - Public Budgeting and Finance
IS - 1
ER -