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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
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    3. 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.

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