Assessment of economic impacts from unexpected events with an interregional commodity flow and multimodal transportation network model

Abstract

Loss and damage caused by unscheduled events, especially earthquakes, have sudden and significant impacts not only on the region’s economy where the event occurs but also on other regions. The New Madrid Seismic Zone, located in the center of the United States, could have great impacts on economic activities related to this area, if a major earthquake occurred. Based on the 1993 US Commodity Flow Survey [US Commodity Flow Survey, 1993. Available from: < http://www.bts.gov/ntda/cfs/prod.html>], more than 42% of total commodity flows in the US are related to the greater Midwest, which includes the New Madrid Seismic Zone. If a catastrophic earthquake occurred in this area, the indirect damages could spread far beyond the region, and could have sizable impacts on other regions. A model of interregional commodity flows, incorporating regional input–output relationships, and the corresponding transportation network flows, was applied to assess the economic impacts of such an unexpected event. The economic impacts from the event are described for three hypothetical scenarios, analyzing the magnitude and the extent of the direct and indirect impacts. These analytical results may be used to propose strategic management of the recovery and reconstruction efforts after the event.