Economic Impacts Assessment: Indirect Impact Estimation
Economic Impacts Assessment: Indirect Impact Estimation
- Yasuhide OkuyamaYasuhide OkuyamaThe University of Kitakyushu Graduate School of Social System Studies Kitakyushu Japan
Summary
The indirect impact of disasters results from the ripple effect of damage and the consequent business interruptions of damaged facilities. The amount of financial support for recovery and reconstruction is often determined using the appraised value of damaged assets, such as buildings, equipment, roads, bridges, and lifelines. The estimated indirect impact has been utilized to present the extent and severity of a disaster and evaluate the pre-disaster preparedness and mitigation. Although it can potentially become more significant than the damage or initial business interruptions, its estimation poses a few issues, such as the quality of input data, the choice of estimation method, and the inclusion of disaster features—for example, a resilience and behavioral effect. A wide range of studies have been performed to estimate the indirect impact using various methods and deriving numerous results. The estimation of indirect impact has become increasingly important for not only policy decision-making in the public sector but also supply chain management in the private sector because climate change appears to be increasing the intensity and frequency of natural hazard occurrence, and the intertwined global economy tends to propagate a shock in one country to other countries.
Keywords
Subjects
- Economic Analysis of Natural Hazards
