Administrative Inequalities in Federal Disaster Aid Distribution: Evidence from Wildfires in California

• In Event: After the Fire: Economic and Institutional Responses to Wildfires

Abstract

As climate change intensifies, disaster events such as wildfires, flooding and hurricanes are expected to grow in frequency, intensity, and economic cost, increasing government spending on disaster management. The U.S. federal government plays a central role in providing disaster aid, while federal disaster policy has been long criticized for political motivations and overemphasis on post-disaster relief and recovery rather than proactive mitigation and preparedness. Recent research has documented disparities in funding receipt and their correlation with socioeconomic vulnerability. However, less is known about the systematic roots and institutional drivers of unequal federal aid allocation. 

This paper investigates disparities in different administrative stages of federal aid program implementation. We focus on the Federal Emergency Management Agency (FEMA)’s Individuals and Households Program (IHP) and wildfire-affected communities in California. IHP is FEMA’s major aid program which provides temporary housing assistance (monetary or direct assistance, housing repairs and replacement) and other essential needs to disaster-affected individuals and households. Since 2010, FEMA has distributed over $11.5 billion in IHP assistance across more than 160 disasters (GAO, 2020), with a substantial share directed to wildfire-affected communities in California. Wildfires in California have caused extensive losses for affected households, and unlike hurricanes and floods, most wildfire-induced losses are not covered by a comparable federal insurance program. As a result, IHP plays an important role in supporting wildfire-affected households for response and recovery. 

Using micro-level IHP application registration data from FEMA, socioeconomic and demographic data from the Census, and wildfire exposure maps and damage data from CAL FIRE, we construct two panel datasets at the individual application and ZIP code levels covering 2000-2025, to examine both household and community level patterns. We analyze how applicant characteristics and neighborhood socioeconomic conditions are associated with IHP aid access. Empirically, we conduct multiple regressions, after controlling for disaster-specific and locality fixed effects,  to predict IHP application rates, the likelihood of inspection and eligibility, and the amount of IHP aid received. Results show that ZIP codes with higher proportion of minority population, lower education levels and lower median income levels have lower IHP application rates, controlling for percentage of area exposed to wildfires. Individual applicant level analysis shows that low-income families in fire-exposed zip-codes are less likely to be considered eligible for IHP by FEMA. Low-income families, families with children, renters and primary residence are more likely to receive a home inspection from FEMA to assess their property damage. Findings of this research suggest that inequalities in IHP implementation can manifest at multiple stages of its administrative process, including disparities in application rates and inspection opportunities.

Author

• Shan Zhou, Purdue University
  Presenting Author