The Impacts of Natural Disasters A Framework for Loss Estimation (1999) / Chapter Skim
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3 Indirect Losses of Natural Disasters
3 Indirect Losses of Natural Disasters
Pages 35-44
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From page 35... ...
Far less obvious are losses such as those of industries that are forced to close down because they lack critical power supplies, firms with power that lose business because suppliers or buyers lacked power, and firms that lose business because employees of firms affected by the power outage have reduced incomes and consequently spent less. Compared to a natural disaster's direct effects, indirect losses are more difficult to identify and measure, and are generally spread over a much wider area.
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From page 36... ...
A modeling approach is also potentially able to project expected future outcomes over a period of years, and estimate indirect losses associated with a particular actual event. The forward-looking capability is critical for developing simulation models for planning mitigation and emergency responses.
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From page 37... ...
by firm closures or cutbacks" so-called multiplier, or ripple, effects. Employees of the firms experiencing reduced production and sales suffer income losses and subsequently curtail their own expenditures, initiating a new round of firm cutbacks.
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From page 38... ...
r ~ RECOMMENDATION 3-1: Measurement, study and modeling of indirect losses of natural disasters should concentrate on those losses that occur in the region of impact near the time of the event. The geographic boundaries and the time horizon over which the measurement of indirect losses should occur need to be defined and standardized.
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From page 39... ...
RECOMMENDATION 3-2: The agency charged with collecting the direct loss data should commission surveys for the collection of detailed indirect economic loss data from recent disasters, and establish a program for consistently collecting such data on future disasters until a secondary methodology for "standard" disasters can be validated (see Recommendation 3-3~. Once an adequate indirect loss data base is established, such survey data should be collected for all future disasters that have initial total losses (based on model projections)
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From page 40... ...
Secondary regional data currently available on sales, employment, wages, and income following natural disasters provide an opportunity to test possible mode} modifications, but this testing has not been systematically undertaken. RECOMMENDATION 3-4: A study to test regional economic mode' modifications for disaster loss analysis should be conducted.
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From page 41... ...
Critical documented aspects of each structure include: typical input-output linkages to the regional economy; potential substitutes from outside the regional economy for traditional regional input-output linkages; infrastructure critical and feasible for bringing employees to work; in the case of retailing and service establishments, infrastructure critical and feasible for bringing customers to other places of business; numbers of employees and wages of employee; and profit income in the region.
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From page 42... ...
operate without full service. This information needs to be extended beyond lifelines and to other parts of the United States to better understand regional resiliency to natural disasters.
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From page 43... ...
.__=, ~A _ _ ~ RECOMMENDATION 3-7: Research should be conducted on linking a comprehensive indirect loss model to a probabilistic physical evaluating mitigation and damage catastrophe model, for purposes of improving the efficiency of emergency response programs. In sum, the recommendations outlined in this chapter suggest a mix of primary (data collection, more intensive use of available secondary data, and
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From page 44... ...
development of new modeling techniques tab wiN permit significant costs elective improvement in measurement and prediction of indirect losses.
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