Environmental Earth Sciences

, Volume 65, Issue 1, pp 161–172

Regional indirect economic impact evaluation of the 2008 Wenchuan Earthquake

  • Jidong Wu
  • Ning Li
  • Stéphane Hallegatte
  • Peijun Shi
  • Aijun Hu
  • Xueqin Liu
Original Article

Abstract

Disaster loss estimates are helpful for managing post-disaster reconstruction and for designing disaster-risk mitigation strategies. However, most of these estimates in China merely consider direct losses, and only a few include indirect economic losses. As the most destructive earthquake since the founding of the People’s Republic of China in 1949, the Wenchuan Earthquake that occurred in 2008 resulted in direct economic damages reached Chinese Yuan (CNY) 845 billion (US $124 billion). The aim of the study was to estimate indirect economic losses caused by the Wenchuan Earthquake in Sichuan Province through the Adaptive Regional Input–Output (ARIO) model, which can reflect disaster-related changes in production capacity, ripple effects within the economic system, and adaptive behaviors of economic actors. The results showed that indirect economic losses in the production and housing sectors were estimated at 40% of the direct economic losses, i.e., approximately CNY 300 billion; moreover, the model predicted an 8-year reconstruction period. Several factors contributed to these losses, including significant damages to key sectors, financial constraints on reconstruction, post-earthquake investment instability, and limits in reconstruction capacity. Active government support policies post-earthquake are a useful strategy to mitigate the adverse economic impact of an earthquake in developing countries.

Keywords

Indirect economic losses Wenchuan Earthquake Direct economic losses ARIO model Natural disasters 

Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  • Jidong Wu
    • 1
    • 2
  • Ning Li
    • 1
    • 2
  • Stéphane Hallegatte
    • 3
    • 4
  • Peijun Shi
    • 1
  • Aijun Hu
    • 5
  • Xueqin Liu
    • 6
  1. 1.State Key Laboratory of Earth Surface Processes and Resource EcologyBeijing Normal UniversityBeijingChina
  2. 2.Key Laboratory of Environmental Change and Natural DisasterMinistry of Education, Beijing Normal UniversityBeijingChina
  3. 3.Centre International de Recherche sur l’Environnement et le DéveloppementParisFrance
  4. 4.Ecole Nationale de la Météorologie, Météo-FranceToulouseFrance
  5. 5.Hunan Meteorological BureauChangshaChina
  6. 6.Academy of Disaster Reduction and Emergency ManagementMinistry of Civil Affairs, Ministry of EducationBeijingChina

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