Suppose that early in ayear, a hurricane hits a town in Florida and destroys a substantial number of homes. A portion of this stock ofhousing, which had a market value of $100 million(not including the market value of theland), was uninsured. The owners of the residences spent a total of $4 million during the rest of the year to pay salvage companies to help them save remaining belongings. A small percentage of uninsured owners had sufficient resources to spend a total of $16 million during the year to pay construction companies to rebuild their homes. Some were able to devote their owntime, the opportunity cost of which was valued at $4 million, to work on rebuilding their homes. The remainingpeople, however, chose to sell their land at its market value and abandon the remains of their houses.