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A methodology for estimating business interruption loss caused by flood disasters: insights from business surveys after Tokai Heavy Rain in Japan

Author

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  • Lijiao Yang

    (Wuhan University of Technology
    Kyoto University)

  • Yoshio Kajitani

    (Central Research Institute of Electric Power Industry)

  • Hirokazu Tatano

    (Kyoto University)

  • Xinyu Jiang

    (Kyoto University)

Abstract

This study proposes a probabilistic methodology for estimating the business interruption loss of industrial sectors as an extension of current methodology. The functional forms and parameters are selected and calibrated based on survey data obtained from businesses located in the inundated area at the time of the 2000 Tokai Heavy Rain in Japan. The Tokai Heavy Rain was a rare event that hit a densely populated and industrialized area. In the estimation of business interruption losses, functional fragility curves and accelerated failure time models are selected to estimate the extent of damage to production capacity and production recovery time. Significant explanatory variables, such as inundation depth, distinct vulnerability, and the resilience characteristics of each sector, as well as the accuracy of fit of the model, are analyzed in the study. The function obtained and the estimated parameters can be utilized as benchmarks in estimating the probabilistic distribution of business interruption losses, especially in the case of urban flood disasters.

Suggested Citation

  • Lijiao Yang & Yoshio Kajitani & Hirokazu Tatano & Xinyu Jiang, 2016. "A methodology for estimating business interruption loss caused by flood disasters: insights from business surveys after Tokai Heavy Rain in Japan," 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. 84(1), pages 411-430, November.
    • Handle: RePEc:spr:nathaz:v:84:y:2016:i:1:d:10.1007_s11069-016-2534-3
    DOI: 10.1007/s11069-016-2534-3
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    References listed on IDEAS

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    Cited by:

    1. Xinyu Jiang & Nobuhito Mori & Hirokazu Tatano & Lijiao Yang, 2019. "Simulation-Based Exceedance Probability Curves to Assess the Economic Impact of Storm Surge Inundations due to Climate Change: A Case Study in Ise Bay, Japan," Sustainability, MDPI, vol. 11(4), pages 1-15, February.
    2. David Nortes Martínez & Frédéric Grelot & Pauline Bremond & Stefano Farolfi & Juliette Rouchier, 2021. "Are interactions important in estimating flood damage to economic entities? The case of wine-making in France," Post-Print hal-03609616, HAL.
    3. Weijiang Li & Jiahong Wen & Bo Xu & Xiande Li & Shiqiang Du, 2018. "Integrated Assessment of Economic Losses in Manufacturing Industry in Shanghai Metropolitan Area Under an Extreme Storm Flood Scenario," Sustainability, MDPI, vol. 11(1), pages 1-19, December.
    4. He, Wenjian & Chen, Xiaoyang & Liu, Zhiyong John, 2022. "Can anti-corruption help realize the “strong” Porter Hypothesis in China? Evidence from Chinese manufacturing enterprises," Journal of Asian Economics, Elsevier, vol. 80(C).
    5. Lijiao Yang & Yishuang Qi & Xinyu Jiang, 2021. "An Investigation of the Initial Recovery Time of Chinese Enterprises Affected by COVID-19 Using an Accelerated Failure Time Model," IJERPH, MDPI, vol. 18(22), pages 1-16, November.

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