A Quick Method for Assessing Economic Damage Caused by Natural Disasters: An Epidemiological Approach

In the aftermath of any natural disaster, a quick assessment of economic damage is called for, without which recovery planning and fiscal budgeting is impossible. What is customarily done as damage accounting is to use some aggregation by parts method, which is predisposed to commit double counting, omission, and bureaucratic inconsistencies. As an alternative, we propose to work with a social epidemiological model. First, we present a result by means of a log linear model which shows evidence of hazard factors and vulnerability factors at work. We then simplify the model by deleting the variables that are not significant in a linear formulation. Lastly, we give our estimate of economic damage for the case of the North East Japan Earthquake and Tsunami of March 11, 2011 and alert that the true damage may well be the double of government’s estimate. Copyright International Atlantic Economic Society 2012