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Behavioral Economic Consequences of Disasters: A Basis for Inclusion in Benefit–Cost Analysis

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  • Adam Rose

    (Center for Risk and Economic Analysis of Threats and Emergencies (CREATE), University of Southern California)

Abstract

The purpose of this paper is to develop an analytical framework for estimating the behavioral effects of disasters and their economic consequences. The reduction of these losses represents the benefits of pre-disaster mitigation and post-disaster recovery. We provide conceptualizations, definitions, classifications, and a formal welfare analysis of this category of economic consequences. We also examine methods used to measure behavioral reactions to fear for insight into improving their delineation. Because we are interested in a comprehensive assessment of behavioral effects, we also include resilience adjustments and extend our initial partial equilibrium analysis to the general equilibrium level. The analysis is intended to serve as the basis for the legitimate inclusion of behavioral consequences of disasters in benefit-cost analysis.

Suggested Citation

  • Adam Rose, 2022. "Behavioral Economic Consequences of Disasters: A Basis for Inclusion in Benefit–Cost Analysis," Economics of Disasters and Climate Change, Springer, vol. 6(2), pages 213-233, July.
    • Handle: RePEc:spr:ediscc:v:6:y:2022:i:2:d:10.1007_s41885-022-00107-9
    DOI: 10.1007/s41885-022-00107-9
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    References listed on IDEAS

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    11. Shingo Nagamatsu & Adam Rose & Jonathan Eyer, 2020. "Return Migration and Decontamination After the 2011 Fukushima Nuclear Power Plant Disaster," Risk Analysis, John Wiley & Sons, vol. 40(4), pages 800-817, April.
    12. Susan Cutter, 2016. "The landscape of disaster resilience indicators in the USA," 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. 80(2), pages 741-758, January.
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    15. 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.
    16. Rose Adam Z. & Oladosu Gbadebo & Lee Bumsoo & Asay Garrett Beeler, 2009. "The Economic Impacts of the September 11 Terrorist Attacks: A Computable General Equilibrium Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 15(2), pages 217-244, July.
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    19. Adam Rose, 2004. "Economic Principles, Issues, and Research Priorities in Hazard Loss Estimation," Advances in Spatial Science, in: Yasuhide Okuyama & Stephanie E. Chang (ed.), Modeling Spatial and Economic Impacts of Disasters, chapter 2, pages 13-36, Springer.
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