Dining Through Disaster: An Empirical Analysis of the Jersey Shore Restaurant Industry Following Hurricane Sandy

Abstract

This thesis aims to investigate the economic impact of Hurricane Sandy on the Restaurant industry along the Jersey Shore, a region heavily reliant on tourism and central to the state’s economy. By utilizing a linear regression model with a difference-in-differences framework, combined with establishment-level panel data from 2010-2015, this study compares economic output, through sales and employment metrics, in affected counties to a similar, yet unscathed, control group. The findings of the analysis contradict conventional expectations associated with natural disasters, as food-serving establishments defied anticipated economic disruption. The results revealed no statistically significant decline in either restaurant sales or employment after the hurricane, suggesting that rapid and coordinated recovery efforts, such as government relief funding, eased operational regulations, and shifts in consumer demand, may have effectively counterbalanced the negative economic effects imposed by the storm. The restaurant industry’s response to Hurricane Sandy emphasizes the importance of targeted policy initiatives and community resilience in mitigating economic shocks in affected areas. These findings advocate rethinking the presumed inevitability of economic downturn in the aftermath of natural disasters, especially in industries and regions with strong underlying economic and structural foundations. This thesis contributes to the broader disaster economics literature by highlighting that economic vulnerability to natural disasters is heavily reliant on the region’s internal characteristics, swift recovery protocols, and shifting consumer demand trends.