Economic Loss Assessment for Losses Due to Earthquake under an Integrated Building, Lifeline, and Transportation Nexus: A Spatial Computable General Equilibrium Approach for Shelby County, TN

Abstract

Earthquakes have caused tremendous losses worldwide. Though unpredictable, comprehensive assessment of their impact on urban areas can facilitate effectiveness in mitigation strategies. This paper builds a spatial general equilibrium (SCGE) model for Shelby County, Tennessee, an area located in the most active seismic zone in the central and eastern U.S. Starting from the building, lifeline and transportation damages, this paper also develops means by which such damages can be integrated into the SCGE model for prompt effect estimation. Using novel approaches to represent substitution and shifting behaviors intra-regionally within the county, the model estimated a total of loss over $8 billion in domestic supply due to a hypothetical earthquake. Compared with the outcomes from the model without these behaviors, the magnitude of the losses is smaller in the model with these behaviors. This implies the resistance, resourcefulness and flexibility from economic resilience, as the level of physical damages do vary intra-regionally. Interestingly, although the percentage of losses in domestic supply varies almost linearly with the percentage loss in physical damage intra-regionally, the losses in employment are relatively evenly distributed. This also emphasizes the importance of the shifting and substitution behaviors which make the model profoundly spatial.