Economic loss: myth and measurement

ISSN： 0965-3562

Source： Disaster Prevention and Management: An International Journal, Vol.13, Iss.4, 2004-04, pp. : 290-296

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Abstract

This paper covers a number of pitfalls that could hinder the development of a common methodology for estimating flood damage. Such pitfalls include double counting, ignoring post-disaster liabilities, ignoring non-market losses (e.g. recreation, loss of leisure, damage to historic sites and cultural assets, etc.), ignoring the needs of the end user, and questions as to how indirect/systemic losses might be modeled. With one exception, much of what is discussed in the paper is based on off-the-shelf economics and will not prove to be contentious. Regional economists are likely to have different opinions as to how to best model indirect and systemic loss; it is this that will lead to a lively debate as to how to proceed. Assessments of economic fallout from the World Trade Center attack are used to illustrate some of the problems reported in this paper.