How earthquake-induced direct economic losses change with earthquake magnitude, asset value, residential building structural type and physical environment: An elasticity perspective

Abstract

Diagnosing all components of risk is essential in earthquake loss attribution science, but quantitative estimates on how sensitive the earthquake-induced direct economic losses (DELs) are to changes in hazard, exposure and vulnerability is rarely known. Here the relationship between earthquake DELs and earthquake magnitude (Ms), asset value exposure (K), proportion of non-steel-concrete residential buildings (H) and physical environment instability (E) is quantified using the concept of economic elasticity. Earthquake disaster event-based DEL records over the period from 1990 to 2016 for the mainland of China are fitted to a regression model. Elasticity values for Ms, K, H and E are 7.63, 0.75, 4.92 and 0.91, respectively, indicating that on average, DEL changes are more sensitive to changes in Ms and H—a 13% increase in Ms or a 20% increase in H would double earthquake DELs, while it may take a 133% increase in K or a 110% increase in E to cause the same economic losses. In turn, this suggests that human factors—decreasing H and K—could be efficient ways to reduce earthquake risk, while these two factors will become increasingly relevant for risk assessment in the future with continued economic growth. The elasticity estimate results could be used for studying future change in earthquake risks and for supporting disaster risk reduction strategies.