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Economic Analysis of Disaster Management Investment Effectiveness in Korea

Author

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  • Bo-Young Heo

    (National Disaster Management Research Institute, Ulsan 44538, Korea)

  • Won-Ho Heo

    (School of Civil and Environmental Engineering, Yonsei University, 50 Yonsei-ro Seodaemun-gu, Seoul 03722, Korea)

Abstract

Governments have been investing in extensive operations to minimize economic losses and casualties from natural disasters such as floods and storms. A suitable verification process is required to guarantee maximum effectiveness and efficiency of investments while ensuring sustained funding. Active investment can be expected by verifying the effectiveness of disaster prevention spending. However, the results of the budget invested in disaster-safety-related projects are not immediate but evident only over a period of time. Additionally, their effects should be verified in terms of the state or society overall, not from an individualistic perspective because of the nature of public projects. In this study, an economic analysis of the short- and long-term effects of investment in a disaster-safety-related project was performed and the effects of damage reduction before and after project implementation were analyzed to evaluate the short-term effects and a cost–benefit analysis was conducted to assess the long-term effects. The results show that disaster prevention projects reduce damages over both the short and long term. Therefore, investing in preventive projects to cope with disasters effectively is important to maximize the return on investment. This analysis can be used for developing effective disaster prevention projects.

Suggested Citation

  • Bo-Young Heo & Won-Ho Heo, 2019. "Economic Analysis of Disaster Management Investment Effectiveness in Korea," Sustainability, MDPI, vol. 11(11), pages 1-13, May.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:11:p:3011-:d:234976
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    2. Jiazhen Peng & Xiaojun Shan & Yang Gao & Yohannes Kesete & Rachel Davidson & Linda Nozick & Jamie Kruse, 2014. "Modeling the integrated roles of insurance and retrofit in managing natural disaster risk: a multi-stakeholder perspective," 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. 74(2), pages 1043-1068, November.
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