Assessing Direct and Indirect Economic Impacts of a Flood Event Through the Integration of Spatial and Computable General Equilibrium Modelling

35 Pages Posted: 30 Jul 2015

See all articles by Lorenzo Carrera

Lorenzo Carrera

Fondazione Eni Enrico Mattei

Gabriele Standardi

Fondazione Eni Enrico Mattei

Francesco Bosello

University of Milan - Department of Economics, Business and Statistics; CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

Jaroslav Mysiak

Fondazione Eni Enrico Mattei (FEEM)

Multiple version iconThere are 2 versions of this paper

Date Written: December 2013

Abstract

In this paper we developed and tested an integrated methodology for assessing direct and indirect economic impacts of flooding. The methodology combines a spatial analysis of damage to physical stocks with a general economic equilibrium approach using a regionally-calibrated (to Italy) version of a Computable General Equilibrium (CGE) global model. We applied the model to the 2000 Po River flood. To account for the uncertainty in the induced effects on regional economies, we explored three disruption and two recovery scenarios. The results prove that: i) indirect losses are a significant share of direct losses, and ii) the model is able to capture both positive and negative economic effects of a disaster in different areas of the same country. The assessment of indirect impacts is essential for a full understanding of the economic outcomes of natural disasters.

Keywords: flood risk, indirect impacts, computable general equilibrium, natural disasters

Suggested Citation

Carrera, Lorenzo and Standardi, Gabriele and Bosello, Francesco and Mysiak, Jaroslav, Assessing Direct and Indirect Economic Impacts of a Flood Event Through the Integration of Spatial and Computable General Equilibrium Modelling (December 2013). CMCC Research Paper No. 202, Available at SSRN: https://ssrn.com/abstract=2637313 or http://dx.doi.org/10.2139/ssrn.2637313

Lorenzo Carrera (Contact Author)

Fondazione Eni Enrico Mattei ( email )

C.so Magenta 63
Milano, 20123
Italy

Gabriele Standardi

Fondazione Eni Enrico Mattei ( email )

Corso Magenta 63
20123 Milan
Italy

Francesco Bosello

University of Milan - Department of Economics, Business and Statistics

Via Festa del Perdono, 7
Milan, 20122
Italy

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Jaroslav Mysiak

Fondazione Eni Enrico Mattei (FEEM) ( email )

C.so Magenta 63
Milano, 20123
Italy

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