HR: 11:35h
AN: U32B-05    [Abstracts]
TI: Modeling Regional Economic Impacts of Natural Disasters
AU: * Boissonnade, A
EM: augusteb@rms.com
AF: Risk Management Solutions, 7015 Gateway Boulevard, Newark, CA 94560, United States
AU: Hallegate, S
EM: hallegatte@centre-cired.fr
AF: C.I.R.E.D., Météo-France 45bis, Av de la Belle Gabrielle, Nogent-sur-Marne, 94736, France
AU: Muir-Wood, R
EM: robertm@rms.com
AF: Risk Management Solutions, Ltd., Peninsular House, 30 Monument Street, London, EC3R 8HB, United Kingdom
AU: Schlumberger, M
EM: mschlumberger@rms,com
AF: Risk Management Solutions, 7015 Gateway Boulevard, Newark, CA 94560, United States
AU: Onur, T
EM: tonur@rms.com
AF: Risk Management Solutions, 7015 Gateway Boulevard, Newark, CA 94560, United States
AB: Common features of natural disasters are intense regional impacts and the need for assessing their economic impacts on the construction sectors. The years 2004 and 2005 were record-setting time for natural disasters with major disasters or catastrophic (Cat) events all around the world with dramatic consequences in human lives and economic losses around the world, affecting developed and developing countries. Although there is a large body of literature on assessing the impact of cat events, there is little available research on the quantification and modeling of the regional economic impact of such events on the cost and length of reconstruction. Current available econometric models have serious limitations because they need detailed information for modeling the complex interactions between the different stakeholders of the economy at a regional level that is generally not available. Also, very little research was performed for quantifying the demand surge, defined as the sudden increase in the cost of repairs due to amplified payments, following a hurricane or a series of hurricane events or other natural disasters. Demand surge is an important component of the overall economic impact of cat events and there is a need to better quantify it. This paper presents results of a research program that started after the 2004 and 2005 U.S. hurricane seasons. A large data set of economic and observed losses resulting from the hurricanes that affected Florida and the Gulf states in the US was collected at county level. This provided us with the basis for assessing the change in repair costs before and after these historical events, to quantify the demand surge (after removing the underlying baseline trends) at several dozens of locations across the areas affected, and to provide information on how the changes in demand surge vary spatially and temporally in affected areas for which the amount of structure losses were reported. A parallel research effort was undertaken for identifying and quantifying the main drivers behind the demand surge by conducting survey among the different stakeholders involved in the reconstruction. Results of this work were used for developing a relatively simple economic model that is dependent on information available at the county level that includes econometric metrics prior to the event and the losses following catastrophic events. These losses are either observed or modeled with physical models. The economic model was validated and tested with data collected from the 2004 and 2005 hurricanes. Historical reconstructions of economic losses from 1992 Andrew and other historical events were performed for different regions of the US. The goal is to develop an economic model that can include regional economic conditions at the time of the events for a better modeling of economic losses resulting from cat events that can be used for a better assessment of the risk.
DE: 3399 General or miscellaneous
DE: 6309 Decision making under uncertainty
SC: Union [U]
MN: 2007 Joint Assembly