The Economics of Natural Disasters : Concepts and Methods

Hallegatte, Stephane; Przyluski, Valentin

dc.creator	Hallegatte, Stephane
dc.creator	Przyluski, Valentin
dc.date	2012-03-19T18:43:28Z
dc.date	2012-03-19T18:43:28Z
dc.date	2010-12-01
dc.date.accessioned	2023-02-17T21:07:13Z
dc.date.available	2023-02-17T21:07:13Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101221155640
dc.identifier	http://hdl.handle.net/10986/3991
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244961
dc.description	Large-scale disasters regularly affect societies over the globe, causing large destruction and damage. After each of these events, media, insurance companies, and international institu-tions publish numerous assessments of the "cost of the disaster." However these assessments are based on different methodologies and approaches, and they often reach different results. Besides methodological differences, these discrepancies are due to the multi-dimensionality in disaster impacts and their large redistributive effects, which make it unclear what is included in the estimates. But most importantly, the purpose of these assessments is rarely specified, although different purposes correspond to different perimeters of analysis and different definitions of what a cost is. To clarify this situation, this paper proposes a definition of the cost of a disaster, and emphasizes the most important mechanisms that explain and determine this cost. It does so by first explaining why the direct economic cost, that is, the value of what has been damaged or destroyed by the disaster, is not a sufficient indicator of disaster seriousness and why estimating indirect losses is crucial to assess the consequences on welfare. The paper describes the main indirect consequences of a disaster and the following reconstruction phase, and discusses the economic mechanisms at play. It proposes a review of available methodologies to assess indirect economic consequences, illustrated with examples from the literature. Finally, it highlights the need for a better understanding of the economics of natural disasters and suggests a few promising areas for research on this topic.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5507
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	AGRICULTURAL ECONOMICS
dc.subject	AGRICULTURE
dc.subject	ALLOCATION
dc.subject	ASSETS
dc.subject	AVALANCHES
dc.subject	BANKRUPTCY
dc.subject	BUSINESS CYCLES
dc.subject	CHANGES IN PRICES
dc.subject	CLIMATE
dc.subject	CLIMATE CHANGE
dc.subject	CLIMATE CHANGE IMPACTS
dc.subject	CONSTRUCTION WORKERS
dc.subject	CONSUMPTION LOSS
dc.subject	COST ANALYSIS
dc.subject	CRED
dc.subject	DAMAGED HOUSES
dc.subject	DAMAGES
dc.subject	DEBT
dc.subject	DEVELOPMENT ECONOMICS
dc.subject	DEVELOPMENT NETWORK
dc.subject	DEVELOPMENT POLICY
dc.subject	DIRECT VALUE
dc.subject	DISASTER
dc.subject	DISASTER MANAGEMENT
dc.subject	DISASTER PREVENTION
dc.subject	DROUGHT
dc.subject	DROUGHTS
dc.subject	EARTHQUAKE
dc.subject	EARTHQUAKES
dc.subject	ECOLOGICAL ECONOMICS
dc.subject	ECONOMETRIC ANALYSIS
dc.subject	ECONOMETRICS
dc.subject	ECONOMIC EQUILIBRIUM
dc.subject	ECONOMIC GROWTH
dc.subject	ECONOMIC GROWTH RATE
dc.subject	ECONOMIC IMPACT
dc.subject	ECONOMIC IMPACTS
dc.subject	ECONOMIC IMPLICATIONS
dc.subject	ECONOMIC LOSS
dc.subject	ECONOMIC MODEL
dc.subject	ECONOMIC MODELS
dc.subject	ECONOMIC PERFORMANCE
dc.subject	ECONOMIC PERSPECTIVE
dc.subject	ECONOMIC RECOVERY
dc.subject	ECONOMIC RESILIENCE
dc.subject	ECONOMIC SECTORS
dc.subject	ECONOMIC SITUATION
dc.subject	ECONOMIC SYSTEMS
dc.subject	ECONOMIC THEORY
dc.subject	ECONOMIC VALUE
dc.subject	ECONOMICS
dc.subject	EPIDEMIOLOGY
dc.subject	EXOGENOUS SHOCKS
dc.subject	EXPLOSION
dc.subject	EXTERNAL SHOCKS
dc.subject	EXTREME EVENTS
dc.subject	FARMER
dc.subject	FINANCIAL CRISES
dc.subject	FINANCIAL IMPACTS
dc.subject	FINANCIAL RESOURCES
dc.subject	FINANCIAL SUPPORT
dc.subject	FLOOD
dc.subject	FLOOD DAMAGE
dc.subject	FLOOD DAMAGES
dc.subject	FLOODS
dc.subject	FOOD SECURITY
dc.subject	FUTURE RESEARCH
dc.subject	GDP
dc.subject	GENERAL EQUILIBRIUM ANALYSIS
dc.subject	GROWTH RATE
dc.subject	GROWTH THEORIES
dc.subject	HEAT WAVES
dc.subject	HURRICANE
dc.subject	HURRICANE RISK
dc.subject	HURRICANE SEASON
dc.subject	HURRICANES
dc.subject	IMPACT OF DISASTERS
dc.subject	IMPACT OF HURRICANES
dc.subject	IMPORTS
dc.subject	INCOME
dc.subject	INHERITANCE
dc.subject	INSURANCE
dc.subject	INSURANCE COMPANIES
dc.subject	INSURANCE INDUSTRY
dc.subject	INSURERS
dc.subject	INTEREST RATE
dc.subject	INVENTORIES
dc.subject	JOBS
dc.subject	LAND DEGRADATION
dc.subject	LANDSLIDES
dc.subject	LOWER COSTS
dc.subject	MACROECONOMIC SHOCKS
dc.subject	NATURAL DISASTER
dc.subject	NATURAL DISASTERS
dc.subject	NATURAL HAZARDS
dc.subject	NATURAL RESOURCES
dc.subject	OIL PRICES
dc.subject	POLITICAL ECONOMY
dc.subject	POSITIVE EXTERNALITY
dc.subject	PRESENT VALUE
dc.subject	PRICE ELASTICITY
dc.subject	PRICE INCREASE
dc.subject	PRODUCTION FUNCTIONS
dc.subject	PRODUCTIVITY
dc.subject	PROPERTY VALUES
dc.subject	RECONSTRUCTION
dc.subject	REDISTRIBUTIVE EFFECTS
dc.subject	REINSURANCE
dc.subject	RELATIVE PRICE
dc.subject	RELATIVE PRICES
dc.subject	RISK ANALYSIS
dc.subject	RISK ASSESSMENT
dc.subject	RISK MANAGEMENT
dc.subject	SAVINGS
dc.subject	SCENARIOS
dc.subject	SMALL BUSINESS
dc.subject	STORM
dc.subject	STORM SURGE
dc.subject	STORM SURGE RISK
dc.subject	STORMS
dc.subject	SUBSTITUTION
dc.subject	TERRORIST
dc.subject	THUNDERSTORMS
dc.subject	TOTAL COST
dc.subject	TOTAL OUTPUT
dc.subject	TSUNAMIS
dc.subject	UNCERTAINTIES
dc.subject	UNEMPLOYMENT
dc.subject	VALUE ADDED
dc.subject	VICTIMS
dc.subject	VOLCANIC ERUPTIONS
dc.subject	WAR
dc.subject	WATER DISTRIBUTION
dc.subject	WEATHER EXTREMES
dc.title	The Economics of Natural Disasters : Concepts and Methods
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region
dc.coverage	The World Region