IDEAS home Printed from https://ideas.repec.org/a/nat/natcom/v13y2022i1d10.1038_s41467-022-30504-3.html
   My bibliography  Save this article

Risk caused by the propagation of earthquake losses through the economy

Author

Listed:
  • J. A. León

    (National Autonomous University of Mexico (UNAM), Ciudad Universitaria, Coyoacán)

  • M. Ordaz

    (National Autonomous University of Mexico (UNAM), Ciudad Universitaria, Coyoacán)

  • E. Haddad

    (University of Sao Paulo, Av. Prof. Luciano Gualberto, 908, FEA 1, Cidade Universitária
    Université Mohammed VI Polytechnique
    The University of Sao Paulo Regional and Urban Economics Lab (NEREUS), Av. Prof. Luciano Gualberto, 908, FEA I,Cidade Universitária)

  • I. F. Araújo

    (University of Sao Paulo, Av. Prof. Luciano Gualberto, 908, FEA 1, Cidade Universitária
    The University of Sao Paulo Regional and Urban Economics Lab (NEREUS), Av. Prof. Luciano Gualberto, 908, FEA I,Cidade Universitária)

Abstract

The economy of a country is exposed to disruptions caused by natural and man-made disasters. Here we present a set of probabilistic risk indicators, the Average Annual Loss (AAL) and the Loss Exceedance Curve (LEC), regarding to production, employment, Gross Domestic Product (GDP), Gross Regional Product (GRP), export volume, inflation, tariff revenue, among others, due to earthquakes. All indicators are computed using a systematic probabilistic approach, which integrates the seismic risk assessment with spatial computable general equilibrium models, both robust and well-known frameworks used worldwide in their respective fields. Our approach considers the induced damage and frequency of occurrence of a vast collection of events that collectively describe the entire seismic hazard of a country, giving us a better and more complete understanding of the full consequence of earthquakes. We illustrate this approach with an example developed for Chile.

Suggested Citation

  • J. A. León & M. Ordaz & E. Haddad & I. F. Araújo, 2022. "Risk caused by the propagation of earthquake losses through the economy," Nature Communications, Nature, vol. 13(1), pages 1-11, December.
    • Handle: RePEc:nat:natcom:v:13:y:2022:i:1:d:10.1038_s41467-022-30504-3
    DOI: 10.1038/s41467-022-30504-3
    as

    Download full text from publisher

    File URL: https://www.nature.com/articles/s41467-022-30504-3
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1038/s41467-022-30504-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adam Rose & Charles K. Huyck, 2016. "Improving Catastrophe Modeling for Business Interruption Insurance Needs," Risk Analysis, John Wiley & Sons, vol. 36(10), pages 1896-1915, October.
    2. Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2005. "Market imperfections in a spatial economy: some experimental results," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 476-496, May.
    3. Stephanie E. Chang & Hadi Dowlatabadi, 2019. "Transportation Disruptions and Regional Supply Chains: A Modeling Framework with Application to Coastal Shipping," Advances in Spatial Science, in: Yasuhide Okuyama & Adam Rose (ed.), Advances in Spatial and Economic Modeling of Disaster Impacts, chapter 0, pages 243-264, Springer.
    4. Elco E. Koks & Mark Thissen, 2016. "A Multiregional Impact Assessment Model for disaster analysis," Economic Systems Research, Taylor & Francis Journals, vol. 28(4), pages 429-449, October.
    5. Yoshio Kajitani & Hirokazu Tatano, 2019. "Advantages of the Regional and Sectoral Disaggregation of a Spatial Computable General Equilibrium Model for the Economic Impact Analysis of Natural Disasters," Advances in Spatial Science, in: Yasuhide Okuyama & Adam Rose (ed.), Advances in Spatial and Economic Modeling of Disaster Impacts, chapter 0, pages 327-358, Springer.
    6. Adam Rose & Shu‐Yi Liao, 2005. "Modeling Regional Economic Resilience to Disasters: A Computable General Equilibrium Analysis of Water Service Disruptions," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 75-112, February.
    7. E. E. Koks & M. Bočkarjova & H. de Moel & J. C. J. H. Aerts, 2015. "Integrated Direct and Indirect Flood Risk Modeling: Development and Sensitivity Analysis," Risk Analysis, John Wiley & Sons, vol. 35(5), pages 882-900, May.
    8. Adam Rose & Gbadebo Oladosu & Shu‐Yi Liao, 2007. "Business Interruption Impacts of a Terrorist Attack on the Electric Power System of Los Angeles: Customer Resilience to a Total Blackout," Risk Analysis, John Wiley & Sons, vol. 27(3), pages 513-531, June.
    9. E. E. Koks & J. Rozenberg & C. Zorn & M. Tariverdi & M. Vousdoukas & S. A. Fraser & J. W. Hall & S. Hallegatte, 2019. "A global multi-hazard risk analysis of road and railway infrastructure assets," Nature Communications, Nature, vol. 10(1), pages 1-11, December.
    10. Eduardo Haddad, 2009. "Interregional Computable General Equilibrium Models," Advances in Spatial Science, in: Michael Sonis & Geoffrey J. D. Hewings (ed.), Tool Kits in Regional Science, chapter 4, pages 119-154, Springer.
    11. Andries Brandsma & d'Artis Kancs & Philippe Monfort & Alexandra Rillaers, 2015. "RHOMOLO: A dynamic spatial general equilibrium model for assessing the impact of cohesion policy," Papers in Regional Science, Wiley Blackwell, vol. 94, pages 197-221, November.
    12. Mabel Marulanda & Martha Carreño & Omar Cardona & Mario Ordaz & Alex Barbat, 2013. "Probabilistic earthquake risk assessment using CAPRA: application to the city of Barcelona, Spain," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 69(1), pages 59-84, October.
    13. Paul A. RASCHKY, 2013. "Estimating the Effects of West Sumatra Public Asset Insurance Program on Short-Term Recovery after the September 2009 Earthquake," Working Papers DP-2013-35, Economic Research Institute for ASEAN and East Asia (ERIA).
    14. Yoshio Kajitani & Hirokazu Tatano, 2018. "Applicability of a spatial computable general equilibrium model to assess the short-term economic impact of natural disasters," Economic Systems Research, Taylor & Francis Journals, vol. 30(3), pages 289-312, July.
    15. Yoshio Kajitani & Hirokazu Tatano, 2014. "Estimation Of Production Capacity Loss Rate After The Great East Japan Earthquake And Tsunami In 2011," Economic Systems Research, Taylor & Francis Journals, vol. 26(1), pages 13-38, March.
    16. Matthew W. Peter & Mark Horridge & G.A.Meagher & Fazana Naqvi & B.R.Parmenter, 1996. "The Theoretical Structure of MONASH-MRF," Centre of Policy Studies/IMPACT Centre Working Papers op-85, Victoria University, Centre of Policy Studies/IMPACT Centre.
    17. Yasuhide Okuyama, 2007. "Economic Modeling for Disaster Impact Analysis: Past, Present, and Future," Economic Systems Research, Taylor & Francis Journals, vol. 19(2), pages 115-124.
    18. Peter B. Dixon, 2006. "Evidence-based Trade Policy Decision Making in Australia and the Development of Computable General Equilibrium Modelling," Centre of Policy Studies/IMPACT Centre Working Papers g-163, Victoria University, Centre of Policy Studies/IMPACT Centre.
    19. Jorgenson, Dale W., 2016. "Econometric general equilibrium modeling," Journal of Policy Modeling, Elsevier, vol. 38(3), pages 436-447.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Shanshan & Kong, Weiling & Wang, Yujie & Yuan, Liang, 2024. "Medium and long-term energy demand forecasts by sectors in China under the goal of “carbon peaking & carbon neutrality”: Based on the LEAP-China model," Energy, Elsevier, vol. 310(C).
    2. Eduardo Amaral Haddad & Inácio F. Araújo & Dina N. Elshahawany & João Gabriel Sacco & Maria Carolina Rogelis-Prada & Antonios Pomonis & Guillermo Toyos & Hogeun Park, 2025. "The Economic Impacts of Flooding in Egyptian Port Cities," Research papers & Policy papers on Economic Trends and Policies 2426, Policy Center for the New South.
    3. Araujo, Inacio F. & Donaghy, Kieran P. & Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2024. "Geographical Propagation of the Economic Impacts of the ISIS Conflict in Iraq," TD NEREUS 6-2024, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    4. Larissa M. Batrancea & Mehmet Ali Balcı & Ömer Akgüller & Anca Nichita & Mircea-Iosif Rus, 2024. "Seismic shocks and financial systems: a topological perspective on Borsa Istanbul after the earthquake," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matteo Coronese & Davide Luzzati, 2022. "Economic impacts of natural hazards and complexity science: a critical review," LEM Papers Series 2022/13, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Liu, Huan & Tatano, Hirokazu & Pflug, Georg & Hochrainer-Stigler, Stefan, 2021. "Post-disaster recovery in industrial sectors: A Markov process analysis of multiple lifeline disruptions," Reliability Engineering and System Safety, Elsevier, vol. 206(C).
    3. Rui Huang & Arunima Malik & Manfred Lenzen & Yutong Jin & Yafei Wang & Futu Faturay & Zhiyi Zhu, 2022. "Supply-chain impacts of Sichuan earthquake: a case study using disaster input–output analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 110(3), pages 2227-2248, February.
    4. Weijiang Li & Jiahong Wen & Bo Xu & Xiande Li & Shiqiang Du, 2018. "Integrated Assessment of Economic Losses in Manufacturing Industry in Shanghai Metropolitan Area Under an Extreme Storm Flood Scenario," Sustainability, MDPI, vol. 11(1), pages 1-19, December.
    5. Araujo, Inacio F. & Donaghy, Kieran P. & Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2024. "Geographical Propagation of the Economic Impacts of the ISIS Conflict in Iraq," TD NEREUS 6-2024, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    6. Zhengtao Zhang & Ning Li & Peng Cui & Hong Xu & Yuan Liu & Xi Chen & Jieling Feng, 2019. "How to Integrate Labor Disruption into an Economic Impact Evaluation Model for Postdisaster Recovery Periods," Risk Analysis, John Wiley & Sons, vol. 39(11), pages 2443-2456, November.
    7. David Mendoza‐Tinoco & Yixin Hu & Zhao Zeng & Konstantinos J. Chalvatzis & Ning Zhang & Albert E. Steenge & Dabo Guan, 2020. "Flood Footprint Assessment: A Multiregional Case of 2009 Central European Floods," Risk Analysis, John Wiley & Sons, vol. 40(8), pages 1612-1631, August.
    8. Yanfang Lyu & Yun Xiang & Dong Wang, 2023. "Evaluating Indirect Economic Losses from Flooding Using Input–Output Analysis: An Application to China’s Jiangxi Province," IJERPH, MDPI, vol. 20(5), pages 1-17, March.
    9. Wei Xie & Adam Rose & Shantong Li & Jianwu He & Ning Li & Tariq Ali, 2018. "Dynamic Economic Resilience and Economic Recovery from Disasters: A Quantitative Assessment," Risk Analysis, John Wiley & Sons, vol. 38(6), pages 1306-1318, June.
    10. Haddad Eduardo Amaral & Okuyama Yasuhide, 2016. "Spatial Propagation of the Economic Impacts of Bombing: The Case of the 2006 War in Lebanon," Review of Middle East Economics and Finance, De Gruyter, vol. 12(3), pages 225-256, December.
    11. Zhiqiang Yin & Yixin Hu & Katie Jenkins & Yi He & Nicole Forstenhäusler & Rachel Warren & Lili Yang & Rhosanna Jenkins & Dabo Guan, 2021. "Assessing the economic impacts of future fluvial flooding in six countries under climate change and socio-economic development," Climatic Change, Springer, vol. 166(3), pages 1-21, June.
    12. Yoshio Kajitani & Hirokazu Tatano, 2018. "Applicability of a spatial computable general equilibrium model to assess the short-term economic impact of natural disasters," Economic Systems Research, Taylor & Francis Journals, vol. 30(3), pages 289-312, July.
    13. Irfan Ahmed & Claudio Socci & Rosita Pretaroli & Francesca Severini & Stefano Deriu, 2022. "Socioeconomic spillovers of the 2016–2017 Italian earthquakes: a bi-regional inoperability model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(1), pages 426-453, January.
    14. Hu, Xi & Pant, Raghav & Hall, Jim W. & Surminski, Swenja & Huang, Jiashun, 2019. "Multi-scale assessment of the economic impacts of flooding: evidence from firm to macro-level analysis in the Chinese manufacturing sector," LSE Research Online Documents on Economics 100534, London School of Economics and Political Science, LSE Library.
    15. Xi Hu & Raghav Pant & Jim W. Hall & Swenja Surminski & Jiashun Huang, 2019. "Multi-Scale Assessment of the Economic Impacts of Flooding: Evidence from Firm to Macro-Level Analysis in the Chinese Manufacturing Sector," Sustainability, MDPI, vol. 11(7), pages 1-18, April.
    16. Dormady, Noah C. & Rose, Adam & Roa-Henriquez, Alfredo & Morin, C. Blain, 2022. "The cost-effectiveness of economic resilience," International Journal of Production Economics, Elsevier, vol. 244(C).
    17. David Nortes Martínez & Frédéric Grelot & Pauline Bremond & Stefano Farolfi & Juliette Rouchier, 2021. "Are interactions important in estimating flood damage to economic entities? The case of wine-making in France," Post-Print hal-03609616, HAL.
    18. Stéphane Hallegatte, 2014. "Modeling the Role of Inventories and Heterogeneity in the Assessment of the Economic Costs of Natural Disasters," Risk Analysis, John Wiley & Sons, vol. 34(1), pages 152-167, January.
    19. Iman Rahimi Aloughareh & Mohsen Ghafory Ashtiany & Kiarash Nasserasadi, 2016. "An Integrated Methodology For Regional Macroeconomic Loss Estimation Of Earthquake: A Case Study Of Tehran," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-24, September.
    20. Elena Ianchovichina & Maros Ivanic, 2016. "Economic Effects of the Syrian War and the Spread of the Islamic State on the Levant," The World Economy, Wiley Blackwell, vol. 39(10), pages 1584-1627, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nat:natcom:v:13:y:2022:i:1:d:10.1038_s41467-022-30504-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.nature.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.