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A framework for economic loss estimation due to seismic transportation network disruption: a spatial computable general equilibrium approach

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  • Hirokazu Tatano
  • Satoshi Tsuchiya

Abstract

This paper presents a framework for assessing the economic impact of disruption in transportation that can relate the physical damage to transportation networks to economic losses. A spatial computable general equilibrium (SCGE) model is formulated and then integrated with a transportation model that can estimate the traffic volumes of freight and passengers. Economic equilibrium under a disruption in the transportation network is computed subject to the condition that the adjustment of labor and capital inputs is restricted; the model reflects slow adjustment of these linked to the state of recovery. As a case study, the model reviews the large Niigata-Chuetsu earthquake of 2004. Considering the damage to the transportation infrastructure, the model indicates the extent of the economic losses arising from the earthquake distributed over regions as a consequence of the intra- and interregional trade in a regional economy. The results show that 20% of the indirect losses occur in the Niigata region directly affected by the earthquake, whereas 40% of the total losses are experienced in the Kanto region and non-negligible losses reach rather remote zones of the country such as Okinawa. Copyright Springer Science+Business Media B.V. 2008

Suggested Citation

  • Hirokazu Tatano & Satoshi Tsuchiya, 2008. "A framework for economic loss estimation due to seismic transportation network disruption: a spatial computable general equilibrium approach," 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. 44(2), pages 253-265, February.
    • Handle: RePEc:spr:nathaz:v:44:y:2008:i:2:p:253-265
    DOI: 10.1007/s11069-007-9151-0
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    References listed on IDEAS

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    2. Loïc Cadiou & Stéphane Dées & Jean-Pierre Laffargue, 2000. "A computable General Equilibrium Model with Vintage Capital," Working Papers 2000-20, CEPII research center.
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    4. 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.
    5. Adam Rose & Shu‐Yi Liao, 2005. "Modeling Regional Economic Resilience to Disasters: A Computable General Equilibrium Analysis of Water Service Disruptions," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 75-112, February.
    6. Jungyul Sohn & Geoffrey J. D. Hewings & Tschangho John Kim & Jong Sung Lee & Sung-Gheel Jang, 2004. "Analysis of Economic Impacts of an Earthquake on Transportation Network," Advances in Spatial Science, in: Yasuhide Okuyama & Stephanie E. Chang (ed.), Modeling Spatial and Economic Impacts of Disasters, chapter 12, pages 233-256, Springer.
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