Modeling post-earthquake business recovery time: An analytical framework

Abstract

This study develops an analytical framework for modeling business recovery times after seismic events. These recovery times are important to understand, as business interruption (BI) is a significant factor in the survival of businesses and communities after disasters, and can cause a large proportion of the losses in such events. To date however, few post-earthquake recovery studies specifically account for business recovery time. The proposed framework considers multiple types of earthquake-induced downtime that may impact business recovery, such as building recovery and disruption to the wider community, as well as tactics employed by businesses to mitigate these times. The framework's potential to provide insight on business recovery is evaluated using observed recovery time data for 22 businesses affected by the 2011 Mw 6.1 Christchurch earthquake in New Zealand. It is found that recovery times calculated according to the framework align significantly better with observed business recovery times compared to calculated downtimes of businesses' pre-earthquake physical locations, which are often used as proxies for business recovery. These findings highlight the importance of accounting for multiple factors when modeling business recovery due to seismic events.