TIME-VARYING DISASTER RECOVERY MODEL FOR INTERDEPENDENT ECONOMIC SYSTEMS USING HYBRID INPUT–OUTPUT AND EVENT TREE ANALYSIS

Abstract

Disasters damage physical infrastructure systems, disrupt the movement of people and commodities, and cause significant economic losses. This paper develops an I–O model extension using an event tree analysis to assess the propagation of disaster effects across interdependent economic sectors using the inoperability and economic loss metrics. Inoperability, a dimensionless index that ranges between 0 and 1, indicates the extent to which a sector's production deviates below its normal state. On the other hand, economic loss is the monetary worth of the drop in output incurred in each sector of the economy due to the disaster. The new dynamic I–O extension is capable of adjusting the inoperability parameters within the disaster timeline to reflect events that can either degrade or enhance the predicted paths of sector recovery. It was implemented to the Nashville region – a metropolitan area in the USA known for its vibrant music and the tourism industry. The Nashville region is frequently hit by natural disasters such as tornadoes and floods, which makes it a suitable case study site for the model application. Results of the study can help identify critical economic sectors and ultimately provide insights for formulating preparedness decisions to expedite disaster recovery.

Keywords:

• Inoperability
• Input–output modeling
• Event trees
• Disasters

Acknowledgments

The authors would like to acknowledge the suggestions offered by Adam Rose and Jerry Brashear. Points of view expressed in this manuscript belong to the authors and do not represent the official positions of the above agencies.

Notes

¹While the model is able to decompose direct losses and higher-order effects, some losses (e.g. the value of iconic buildings) are not easy to quantify. Furthermore, some effects stem from extreme behavioral responses related to fear, which are also difficult to quantify.

²Previous approaches used initial conditions and treated recovery as an exponentially decreasing function.

³Detailed reviews of economic resilience definitions, categories, and enhancement strategies are discussed by Rose (2009) and Rose and Liao (2005).

⁴Gross state product and gross regional product are commonly referred to as GDP in BEA website.

⁵The 65-sector NAICS aggregation is adapted from the annual I–O accounts from the US Bureau of Economic Analysis.

⁶Note that the Utilities sector comprises three subsectors, namely (1) electric power, (2) natural gas, and (3) water and sewerage systems. This paper only considers an aggregated outage scenario to the overall Utilities sector.