When the Cost of a Snowstorm Is Money and More

As of yesterday evening, NYC’s Central Park reported 10 inches of snow.

You can see how much it could cost:

Also, the NY Times tells us that DoorDash canceled deliveries until 10 am this morning.

But there is so much more.

The Cost of a Snowstorm

A convergence of extreme cold and moisture resulted in the massive reach of yesterday’s (and today’s) storm. Extending from Mississippi to Massachusetts and Kentucky to Maine, it touched 100 million people.

Snow removal

A basic necessity, municipalities plan for snow through their snow plow fleet:

In addition, New York City’s armada of 400 salt spreaders needs huge inventories of salt and sand. During Winter Storm Jonas (aka the Blizzard of 2016), the total was 300,000 tons of salt.

As for workers, hourly wage earners lose their paychecks, retail establishments lose sales, and municipalities lose tax revenue. A 2014 study said lost wages added up to the largest numbers, especially for construction and manufacturing workers.

In their 2014 snowstorm cost report, researchers from IHS Global Insight distinguished between direct and derived dollars. Direct refers to the wages and the retail sales that would have happened during the storm. Then, the derived segment is the ripple that follows shrunk sales. Essentially, we have a spending multiplier that did not occur.

Whether looking at New York or Missouri, the cost is huge:

Our Bottom Line: Cost

As economists, we know we define cost as far more than a dollar amount. Defined as sacrifice, the cost of a storm is much more than money. Incalculable, you have the loss of life from storms, the highway accidents, the power outages that prevent us from studying, cooking, from leaving our homes. It is a ripple of externalities that extend far beyond the initial impact of the storm.

My sources and more: A 2023 Hustle newsletter was the perfect inspiration and factual foundation for all we posted today. From there, we did loot at a 2014 American Highway Users Report on snow and several news articles, here and here, about this weekend’s record breaking storm.