Case Study: Applying a Regional Cge Model for Estimation of Indirect Economic Losses Due to Damaged Highway Bridges

Authors: Tirasirichai, Chakkaphan; Enke, David

Source: The Engineering Economist, Volume 52, Number 4, October 2007 , pp. 367-401(35)

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Abstract:

Destruction from natural and man-made disasters can result in extensive damage to the affected area's infrastructure. While the destruction results in costs that are necessary to restore the physical destruction and repair of existing infrastructure, a wider economic impact is often indirectly measured and felt. Policy-makers generally focus only on losses that are directly caused by the destruction, such as the replacement of roads and bridges, yet tend to overlook the consequences from indirect economic losses. This study proposes a framework to estimate the indirect economic loss due to damaged bridges within the highway system of a major metropolitan area. For the research, a simulated earthquake within the St. Louis metropolitan region is selected as a case study. The computable general equilibrium (CGE) model is applied as the loss estimation tool for modeling the indirect cost. The study results show that the indirect loss is significant when compared to the direct loss and should therefore be considered by policy-makers when making both pre- and post-disaster infrastructure decisions.

Document Type: Research article

DOI: http://dx.doi.org/10.1080/00137910701686996

Affiliations: 1: Department of Engineering Management and Systems Engineering, University of Missouri-Rolla, Rolla, Missouri, USA

Publication date: 2007-10-01