On direct estimation of initial damage in the case of a major catastrophe: derivation of the "basic equation"

Input-output analysis (I-O) is increasingly used in studies of sudden catastrophes such as earthquakes, hurricanes, or, in the case of The Netherlands, major flooding. Unfortunately, in catastrophe analysis, there is no general consensus over the points of departure. Therefore, we need a basic notion of “where to start from”. One task the I-O modeller faces after the disaster is to construct a plausible basis for the recovery and reconstruction efforts. Here the literature has developed the concept of the so-called event matrix. The event matrix is an I-O compatible matrix that traces the development of the situation at selected intervals after the catastrophe and during the reconstruction phase. However, the concept of I-O on the basis of a well-founded “event matrix” theory is still developing. It is the purpose of this paper to put forward a specific point of departure in disaster analysis, starting from I-O fundamentals and introducing the concept of a “basic equation” as a necessary first step in the construction of an event matrix.