Natural or man-made disasters may impact measures of state personal income in two ways: they may disrupt the flow of income in the economy (typically reducing it in the short run and boosting it later); and they may temporarily lead to increases in transfer receipts. BEA's estimates of personal income reflect both types of effects.
Disruptions to the flow of income are generally embedded in the source data used in estimating personal income and its components. Thus, BEA is not able to separately quantify the impact of natural or man-made disasters on these measures of income. Nonetheless, in the short run, compensation may decline in industries directly affected by the disaster because of a decline in production, while compensation in other industries, such as those involved in cleanup, repair, and reconstruction (construction and health care and social assistance) may be boosted. Similarly, compensation may be boosted in areas that receive evacuees, both from the increased activity to support the population influx (e.g. doctors moving into the area) and to the extent that the evacuees themselves may find employment.
Transfer receipts may temporarily increase under government programs designed to provide disaster relief, such as Other Needs Assistance and Disaster Relief Benefits, and may increase under other programs such as SNAP which have special provisions for persons affected by disasters.