NOLA businesses weather evacuation

Charles Abbyad, head matre d' of the French Creole restaurant Arnauds in the French Quarter of New Orleans, speaks with the restaurant owner after checking for damages Tuesday.

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KAI RYSSDAL: ity officials in New Orleans say it's going to be another day or two before they're really ready to have evacuees come home. It's much the same story all along the Gulf Coast.

Because not too many people in Gustav's path were taking any chances. Nearly 2 million people headed north to get out of the way. But a delayed return is a problem they're happy to have, given the alternative.

Even though the storm wasn't as severe as expected, it still left billions in property damage behind it. But a bigger cost to business might turn out to be living with frequent mass evacuations. Marketplace's Dan Grech has more.


DAN GRECH: Hurricane Gustav turned New Orleans into a ghost town. In a city of 300,000 people, an estimated 10,000 remained.
Doug Woodward at the University of South Carolina says economists have a name for that.

DOUG WOODWARD: Yes, we call it a shock, an economic shock. Subject to shocks, people change their behavior, and it takes a certain amount of time before it gets back to normal.

Woodward says if mass evacuations were to become the norm, businesses would think twice about locating in the Southeast.

WOODWARD: To realize that every year, even if the big one doesn't occur, you still might have to evacuate. It certainly doesn't help our competitive advantage.

Most insurance policies don't cover losses due to an evacuation.

Robert Hartwig with the Insurance Information Institute says companies are forced to adapt.

Robert Hartwig: In many cases, the business is just shifted forward to another point in time. If you're a hotel or a restaurant, the convention might be rescheduled for a few weeks later.

Small businesses are particularly vulnerable to evacuations.

Yi Deng is a computer science professor at Florida International University.

YI DENG: A critical thing missing is reliable real-time information, such as, Where are my employees? Where are my supplies? What's the status of my customers?

One study found 40 percent of companies that stay closed for three days after a storm were out of business within three years. The New Orleans evacuation is expected to last four days.

I'm Dan Grech for Marketplace.

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