The economic costs of natural disasters, terrorist attacks, and other calamities: An analysis of economic models that quantify the losses caused by disruptions

Abstract

Over the past decade, numerous studies have estimated the economic impacts of a variety of disruptions. Most of these studies are based on macroeconomic models that quantify the direct and indirect economic losses from a disruption. Direct economic losses occur due to damaged facilities or when consumers change their purchasing behavior because of the disruption. Indirect economic losses occur when directly impacted businesses consequently reduce their orders to their suppliers. Indirect economic losses are often larger than direct economic losses. This paper compiles the results from these economic models in order to compare the costs of different disruptions and help decision makers prioritize among disruptions. We compare the direct and indirect economic losses from a variety of disruptions, including earthquakes, hurricanes, terrorist attacks, pandemic diseases, and port closures. Some studies model hypothetical scenarios, but other studies quantify the economic losses from historical events such as the September 11 attacks and the 2011 Japanese tsunami. This paper provides a useful benchmark to understand the consequences from disruptions and highlight areas that public officials could address in planning for future disruptions.

A Survey on Mobile Crowd-Sensing and Its Applications in the IoT Era

“…This can be defined as the real components of related systems to provide services to sustain, or enhance people daily life conditions. The evaluation of the condition of civil infrastructures and critical facilities is especially important after natural disasters such as earthquakes, hurricanes, or manmade disasters, namely terrorist attacks [126] Two of the most common infrastructure MCS applications are drive sensing and structure health monitoring. In the following we provide detailed description for the latter.…”

“…One of the infrastructures that need continuous monitoring are bridges as they are vulnerable to natural wear and their collapse leads to disasters. Monitoring structural health of bridges is one of the goals of infrastructure monitoring [125], [126]. Elsersy et al [128] proposed SHM model using WSNs to monitor and detect the damage condition of the real bridge.…”

Optimal Resource Allocation Model to Prevent, Prepare, and Respond to Multiple Disruptions, with Application to theDeepwater HorizonOil Spill and Hurricane Katrina

“…Al Kazimi and Mackenzie (2016) review the literature on the economic consequences of disruptions. The largest disruptions-such as an earthquake with a magnitude of 8 or more, Hurricane Katrina, and the September 11 terrorist attacks-led to economic losses that exceeded $100 billion.…”

Estimating production losses from disruptions based on stock market returns: Applications to 9/11 attacks, the Deepwater Horizon oil spill, and Hurricane Sandy

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“…Unfortunately, the frequency and damages from these disruptions seem to be increasing. The global cost of natural disasters has risen from approximately $50 billion in the 1980s to $200 billion per year in the 2010s (Al Kazimi, A. & MacKenzie, C., 2016;Associated Press, 2014).…”