Impact Assessment of Natural Disaster Damage on the National Economy Using the Input-Output Model

Abstract

In this study, the input-output model (IO model) was used to quantitatively estimate indirect damages caused to industries by those that are directly impacted by natural disasters; the corresponding impact on the national economy was also evaluated. Indirect damages from other industries due to direct damages of natural disasters were mainly observed in the manufacturing industry, while the impact on the service industry was minimal. For example, natural disasters have led to the largest direct damages to the construction industry, as well as to industries involved in the manufacture of textiles, leather, and transport equipment. The results of the evaluation of the impact on the national economy, by comparing the average annual GDP and natural disaster damage, showed that the total damage (direct damage + indirect damage) is almost three times higher than when only considering direct damage. Therefore, in order to implement effective disaster management, it is necessary to consider indirect damages by industries along with direct damages during decision making. Keywords: Disaster Management, Indirect Damage, Input-output Model, National Economy, Natural Disaster