Evaluation of Indirect Economic Effects Caused by the 1983 Nihonkai-chubu, Japan, Earthquake

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Abstract
Effects of an earthquake are not necessarily restricted to damage of structures, but extend much further. This paper presents a method for estimating indirect economical effects caused by an earthquake. Loss of production may be caused by a decrease of products due to damage of production, damage of transportation facilities, and damage of materials and goods. Effect of investment for restoration is also considered. Based on direct loss associated with production loss, a secondary “ripple” effect was estimated through an inter-industry relation analysis (input-output analysis). The procedure was applied to the Nihonkai-chubu, Japan, Earthquake of 1983. Estimated gross products at the damaged region agreed fairly well with those actually observed after the earthquake.

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