The Regional Economic Impact of an Earthquake: Direct and Indirect Effects of Electricity Lifeline Disruptions

Abstract

This paper develops a methodology to estimate the regional economic impacts of electricity lifeline disruptions caused by a catastrophic earthquake. The methodology is based on specially designed input-output and linear programming models. A simulation of a major earthquake in the New Madrid Seismic Zone near Memphis, Tennessee, indicates the potential production loss over the recovery period could amount to as much as 7 percent of gross regional product. Reallocation of scarce electricity across sectors could reduce the impacts substantially. Additionally, an improved restoration pattern of electricity transmission substations across subareas could reduce losses even more.

Input–output Analysis: The Next 25 Years

“…Steenge and Bočkarjova, 2007;Li et al, 2013), earthquakes (e.g. Rose et al, 1997;Okuyama, 2004), and terrorism (Santos and Haimes, 2004).…”

Toward a Sustainable and Resilient Future

“…However, most such models are at spatial and temporal scales that do not resolve specific climate extremes or disasters (Hallegatte et al, 2007). At higher spatial resolution, numerical models (e.g., inputoutput models, calculable general equilibrium models) can help to assess disaster consequences and, therefore, balance the cost of disaster risk management actions and their benefits (Rose et al, 1997;Gordon et al, 1998;Okuyama, 2004;Rose and Liao, 2005;Tsuchiya et al, 2007;Hallegatte, 2008b). In particular, they can compare the cost of responding to disasters with the cost of preventing disasters.…”

Evaluation of indirect loss from hypothetical catastrophes in two regions with different economic development levels in China

“…Gordon et al, 1998;Hallegatte, 2008), computable general equilibrium (CGE) models (e.g. Rose et al, 1997Rose et al, , 2007Rose and Liao, 2005;Tsuchiya et al, 2007;Xie et al, 2012) and hybrid physical-economic models (e.g. Booker, 1995;Holden and Shiferaw, 2004).…”