Workshop on the Social and Economic Impacts of Weather
2-4 April 1997
U.S. Weather Research Program
American Meteorological Society
Electric Power Research Institute
University Corporation for Atmospheric Research
White House Subcommittee on Natural Disaster Reduction
Environmental and Societal Impacts Group (NCAR)
Significant potential exists for society to benefit in tangible ways from improvements in the
specificity, reliability, verification, and usefulness of weather forecasts on time scales of minutes
to days. Weather is important to society from the standpoint of responding to extreme events and
also from the standpoint of improving decision making in the face of the more typical day-to-day
vagaries of weather.
Why should society care about weather?
Extreme Event Impacts in The United States
event, $ loss,
summarizes data presented at
the meeting on the direct
impacts of recent extreme
events in the United States
as measured by loss of life
and current dollar losses.
There was general agreement
among participants that the
relatively poor quality of
available data on impacts
limits conclusive findings.
Several points stand out.
First, it may come as a
surprise that the largest loss
of life in recent years has
been associated with extreme
among the first four
phenomena listed in the box,
floods result in the most
deaths, followed by winter
storms and tornadoes, and
finally hurricanes. Lightning
has perennially been
associated with a large loss
In terms of the economic losses associated with extreme weather, a conservative estimate of
national losses is on the order of $300 million per week. The number is conservative because it
neglects the effects of inflation, covers only the direct impacts of extreme events, and leaves out
the costs associated with extreme temperatures, which are certainly significant. The actual total
economic impacts associated with extreme weather events is likely to be several times that
Trend data can mislead. Workshop participants pointed out that underlying the data on extreme
event impacts are sub-trends in
climate patterns and changes in
society. For instance, hurricane
damages have risen almost
exponentially in recent decades
during a period of decreased
hurricane activity. The reason for
the increase in damages is the
enormous coastal growth, placing
more people and their property in
vulnerable locations. As a
consequence of societal change,
historical impacts data is likely to
underestimate today's vulnerability
In recognition of our relatively poor
understanding of trends in impacts
and the underlying vulnerability to
those impacts, participants at the
Workshop put together a qualitative
summary of trends in impacts, event
frequency and intensity, and causes
for the trends. This figure is shown
in Table 2.
The figure shows that impacts
associated with all extreme events, on a roughly 20-year time scale, are perceived as increasing
in terms of both deaths and dollars (with the single exception of tornado-related deaths).
Additionally, the figure shows that participants perceived that the increase in impacts was largely
due to societal factors with respect to each phenomenon, expect for perhaps floods. Participants
identified a need to better understand the interrelationship of climatological and societal factors
which underlie the trends in impacts.
Economic efficiency and competitiveness
Participants felt strongly that the cumulative impacts of more typical day-to-day weather were
significant, and probably much larger than the attention-getting extreme events. Day-to-day
weather associated with temperature, precipitation, winds, etc. has the potential to disrupt
decision making, thereby adding to the "cost of doing business." The impacts of weather on the
day-to-day costs of business are thus a matter of economic efficiency and competitiveness.
Present at the meeting were experts from the following industries: oil and gas, electric power,
surface transportation, agriculture, aviation, and insurance. They related numerous examples of
the effects of weather that decision makers face in their day-to-day operations and the potential
value of improved weather information and information use. Examples of impacts and their
potential reduction include:
Oil and gas exploration:
- improved forecasts of tropical weather conditions (wind, waves, disturbances) can
reduce delays in drilling operations at a cost of up to $250,000 per rig per day
(several thousand rigs in the Gulf).
- improved hurricane track predictions could reduce days of production shutdown,
each day of which costs the industry and the U.S. treasury a combined
- improved temperature and precipitation forecasts can lead to greater efficiency in
chemical spraying (e.g., pesticides), which costs $10-$15 per acre per application
for hundreds of thousands of acres.
- on a national scale the annual cost of lost production to the vegetable processing industry,
primarily due to weather, is $42,500,000.
- a single hurricane could lead to more than $50,000,000,000 in damages.
- weather-related catastrophes have led to more than $48,000,000,000 in property
insurance claims over the period 1989-1993.
- it costs $2,000 per hour to stop a train. A single tornado warning covering 15
miles of track for 15 minutes can lead to seven stopped trains.
- most weather-related derailments cost $1,000,000 to $5,000,000.
- using improved thunderstorm forecasts could save one utility $200,000 annually
in reduced outage time.
- using "good QPF forecasts" could save one utility $2,000,000 over five years.
- using improved temperature forecasts could save "hundreds of millions annually
nationwide for the utility sector".
Participants observed that while extreme events capture the attention of the public and policy
makers, it is in the area of improved decision making in the face of routinely disruptive weather
where the greatest economic savings to the nation can accrue. This is because typical decision
making is more amenable to study and optimization as compared to the highly infrequent and
uncertain environment that characterizes extreme events. With many trials, significant value can
- every avoided cancellation saves $40,000, every avoided diverted flight saves
- for the 16 members of the Air Transport Association, delays and cancellations
cost $269,000,000 annually.
How can we better understand the use/value of weather information to society?
The answer to this question is needed in at least three areas: (1) in the research prioritization
process, (2) in order to inform policy makers and the public of the value of weather information,
and (3) to contribute to more effective decision making utilizing weather information.
Social scientists utilize a range of methodologies to research the use and value of information to
decision makers. Examples include:
Participants at the Workshop concluded that tools such as these are available to better understand
the value to society of improved forecasts and to contribute to improved use of weather
information by decision makers. The tools have been well developed, and thus do not need
additional refinement to be applied in the context of weather and society.
- prescriptive studies assume that decision maker behave in a manner consistent with
prescribed principles, such as maximization of expected utility. Such studies typically
involve formal modeling of decision situations.
- descriptive studies focus on the context in which actual decision makers operate in order
to describe their behavior. Such studies can use models, but also can rely on narrative
- decision analysis focuses on choosing among a set of alternative actions based on
expected probabilities and values associated with various outcomes.
- institutional analysis focuses on the role that various institutional factors such as goals,
rules, norms, authority, control play in creating circumstances for effective or less-than-effect decision making.
- microeconomics is the area of economics that focuses on the behavior of individuals and
firms in a market setting.
- macroeconomics is the area of economics that focuses on the entire economy in an
- survey techniques are used to assess the value of certain information or services to
decision makers through, for example, assessing their willingness to pay.
Value to Society is a Function of Information Quality AND Information Use
It has long been recognized that information acquires value through influencing the behavior of
decision makers. A perfect forecasts is of no value if it is unavailable to or unusable by a
decision maker. Consequently, attention must be focused on the use and value of weather
information in parallel to ongoing efforts to improve the quality of the information. Participants
at the Workshop noted that, typically, greater attention is paid to improving the quality of
information than it is to improving the use of information. As a result, decision makers do not
use existing information products to their full potential. This theme was reinforced by the
representatives of the "user community" at the Workshop who felt strongly that existing weather
information is not as well used as it could be.
- Establish an ongoing user-based group to advise the USWRP (and others) on needed
research and feedback information on research value.
- Focus a complementary research effort, parallel to research focused on improving
weather information, in the area of the use and value to society of weather information.
Two areas are particularly important:
- Conduct a comprehensive assessment of the use and value of weather information
in a particular community (population <100,000) in order to systematically
identify opportunities for and constraints on improved use of information by
various decision makers. Work with similar initiatives under way by the Federal
Emergency Management Agency, Insurance Institute for Property Loss
Reduction, and Center for Disease Control. Such an assessment could ultimately
lead to the development of "tool kits" for decision makers to help guide use of
weather information. Such "tool kits" would be tested as prototypes prior to
- Support focused evaluations of the use and value of weather information in
various decision contexts, in particular public and private sectors in order to
establish an understanding of "what works" and "what is needed." Such
evaluations could be sponsored through a modest grants program.
Breakout group chairs -
Trends, Chris Adams
Users, Nick Keener
Methodology, Ken Heideman
Societal Aspects of Weather
Workshop's Main Page
Table of Contents