Modeling the Regional Economic Loss of Natural Disasters: The Search for Economic Hotspots

This paper examines the economic impacts of natural disasters using the originally estimated finer geographical scale production datasets and the redefined interregional input–output table. For more effective estimates of direct losses of the disasters, the precise geographical information of industrial distribution is required, because most economic data are published according to political boundaries that may be too aggregated to be the practical information for disaster preventions and retrofit policies. The direct losses are captured by the output data at the district level (500-meter square) by sector and the population density. The map of economic hotspots is obtained after estimating the economic importance of each district. The numerical examples clearly show that the advantages of finer geographical scale datasets and the total economic losses are not proportional to the distributions of population and industrial activities. In other words, the disaster prevention and retrofit policies have to consider the higher-order effects to reduce the total economic loss.