Evaluation of indirect loss from hypothetical catastrophes in two regions with different economic development levels in China

Abstract

This study evaluates and compares the indirect economic loss (IEL) resulting from two hypothetical catastrophes occurring in China – in developed Shanghai and in less-developed Sichuan – to provide new measures of disaster reduction. IEL was divided into indirect economic loss due to the disruption of production process (IEL I) and indirect economic loss induced by the disturbance of industrial lines (IEL II). An input-output model was used to assess these two types of IEL. The study showed that (1) developed regions may be more vulnerable with respect to IEL; (2) IEL II is the primary factor contributing to total IEL; (3) decision makers need to focus on IEL II beside IEL I which is usually the main disaster-reduction target after a disaster; and (4) tradeoff between economic growth and disaster prevention is needed to achieve regional sustainable development.