Structural economic effects of large-scale inundation: a simulation of the Krimpen dike breakage

M. Bočkarjova, A.E. Steenge, A. van der Veen

Research output: Chapter in Book/Report/Conference proceedingChapterAcademicpeer-review

4 Citations (Scopus)

Abstract

The paper’s main concern is to establish a general methodology for economic loss estimation as a result of a large-scale flooding. The issue of economic loss definition is addressed in an attempt to unify the scattered definitions currently circulating in the ‘disaster’ literature. Total effect includes the direct loss to households and government, direct business interruption and induced indirect losses on production all over the country. The input-output model is proposed as a basic modelling framework. The discussion involves appropriate definition of direct and indirect costs within this framework. Adaptations to the model are proposed to account for asymmetric shock aspects such as ‘production bottlenecks’ and substitution effects. The time dimension of the model is a 2-year period. A bi-regional input-output table is utilised for tracing the inter-regional ties within the country and to estimate the disaster-induced changes of the economic structure The case study of a dike breakage in the province of South Holland in the Netherlands provides an example of modelling vast economic consequences. Two basic models are compared: a reference standard input-output damage evaluation model and adjusted models examining the impact of economic recovery of production ‘bottlenecks’ and substitution effects from imports and production transfer to other regions. It is shown that with the same level of initial disruption final loss figure depends on the ability of an economy to adjust. Whereas the presence of ‘bottlenecks’ in the after-flood situation drags the final estimate far below the reference figure, the emergence of flexible conditions for the economic response provides more optimistic results.
Original languageEnglish
Title of host publicationFlood risk management in Europe
Subtitle of host publicationinnovation in policy and practice
EditorsSelina Begum, Marcel J.F. Stive, Jim W. Hall
Place of PublicationBerlin, Germany
PublisherSpringer
Pages131-154
ISBN (Electronic)978-1-4020-4200-3
ISBN (Print)978-1-4020-4199-0
DOIs
Publication statusPublished - 2007

Publication series

NameAdvances in Natural and Technological Hazards Research
PublisherSpringer
Volume25
ISSN (Print)1878-9897
ISSN (Electronic)2213-6959

Fingerprint

Economic effect
Simulation
Disaster
Substitution effect
Economic loss
Modeling
Damage
Indirect costs
Household
Government
Economic structure
Disruption
Economic consequences
Methodology
Economic recovery
Asymmetric shocks
The Netherlands
Interruption
Import
Evaluation model

Keywords

  • PGM
  • ADLIB-ART-243
  • Large-scale flooding
  • Direct and indirect economic loss
  • Economic structure

Cite this

Bočkarjova, M., Steenge, A. E., & van der Veen, A. (2007). Structural economic effects of large-scale inundation: a simulation of the Krimpen dike breakage. In S. Begum, M. J. F. Stive, & J. W. Hall (Eds.), Flood risk management in Europe: innovation in policy and practice (pp. 131-154). (Advances in Natural and Technological Hazards Research; Vol. 25). Berlin, Germany: Springer. https://doi.org/10.1007/978-1-4020-4200-3_8
Bočkarjova, M. ; Steenge, A.E. ; van der Veen, A. / Structural economic effects of large-scale inundation : a simulation of the Krimpen dike breakage. Flood risk management in Europe: innovation in policy and practice. editor / Selina Begum ; Marcel J.F. Stive ; Jim W. Hall. Berlin, Germany : Springer, 2007. pp. 131-154 (Advances in Natural and Technological Hazards Research).
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Bočkarjova, M, Steenge, AE & van der Veen, A 2007, Structural economic effects of large-scale inundation: a simulation of the Krimpen dike breakage. in S Begum, MJF Stive & JW Hall (eds), Flood risk management in Europe: innovation in policy and practice. Advances in Natural and Technological Hazards Research, vol. 25, Springer, Berlin, Germany, pp. 131-154. https://doi.org/10.1007/978-1-4020-4200-3_8

Structural economic effects of large-scale inundation : a simulation of the Krimpen dike breakage. / Bočkarjova, M.; Steenge, A.E.; van der Veen, A.

Flood risk management in Europe: innovation in policy and practice. ed. / Selina Begum; Marcel J.F. Stive; Jim W. Hall. Berlin, Germany : Springer, 2007. p. 131-154 (Advances in Natural and Technological Hazards Research; Vol. 25).

Research output: Chapter in Book/Report/Conference proceedingChapterAcademicpeer-review

TY - CHAP

T1 - Structural economic effects of large-scale inundation

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N2 - The paper’s main concern is to establish a general methodology for economic loss estimation as a result of a large-scale flooding. The issue of economic loss definition is addressed in an attempt to unify the scattered definitions currently circulating in the ‘disaster’ literature. Total effect includes the direct loss to households and government, direct business interruption and induced indirect losses on production all over the country. The input-output model is proposed as a basic modelling framework. The discussion involves appropriate definition of direct and indirect costs within this framework. Adaptations to the model are proposed to account for asymmetric shock aspects such as ‘production bottlenecks’ and substitution effects. The time dimension of the model is a 2-year period. A bi-regional input-output table is utilised for tracing the inter-regional ties within the country and to estimate the disaster-induced changes of the economic structure The case study of a dike breakage in the province of South Holland in the Netherlands provides an example of modelling vast economic consequences. Two basic models are compared: a reference standard input-output damage evaluation model and adjusted models examining the impact of economic recovery of production ‘bottlenecks’ and substitution effects from imports and production transfer to other regions. It is shown that with the same level of initial disruption final loss figure depends on the ability of an economy to adjust. Whereas the presence of ‘bottlenecks’ in the after-flood situation drags the final estimate far below the reference figure, the emergence of flexible conditions for the economic response provides more optimistic results.

AB - The paper’s main concern is to establish a general methodology for economic loss estimation as a result of a large-scale flooding. The issue of economic loss definition is addressed in an attempt to unify the scattered definitions currently circulating in the ‘disaster’ literature. Total effect includes the direct loss to households and government, direct business interruption and induced indirect losses on production all over the country. The input-output model is proposed as a basic modelling framework. The discussion involves appropriate definition of direct and indirect costs within this framework. Adaptations to the model are proposed to account for asymmetric shock aspects such as ‘production bottlenecks’ and substitution effects. The time dimension of the model is a 2-year period. A bi-regional input-output table is utilised for tracing the inter-regional ties within the country and to estimate the disaster-induced changes of the economic structure The case study of a dike breakage in the province of South Holland in the Netherlands provides an example of modelling vast economic consequences. Two basic models are compared: a reference standard input-output damage evaluation model and adjusted models examining the impact of economic recovery of production ‘bottlenecks’ and substitution effects from imports and production transfer to other regions. It is shown that with the same level of initial disruption final loss figure depends on the ability of an economy to adjust. Whereas the presence of ‘bottlenecks’ in the after-flood situation drags the final estimate far below the reference figure, the emergence of flexible conditions for the economic response provides more optimistic results.

KW - PGM

KW - ADLIB-ART-243

KW - Large-scale flooding

KW - Direct and indirect economic loss

KW - Economic structure

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U2 - 10.1007/978-1-4020-4200-3_8

DO - 10.1007/978-1-4020-4200-3_8

M3 - Chapter

SN - 978-1-4020-4199-0

T3 - Advances in Natural and Technological Hazards Research

SP - 131

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BT - Flood risk management in Europe

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PB - Springer

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ER -

Bočkarjova M, Steenge AE, van der Veen A. Structural economic effects of large-scale inundation: a simulation of the Krimpen dike breakage. In Begum S, Stive MJF, Hall JW, editors, Flood risk management in Europe: innovation in policy and practice. Berlin, Germany: Springer. 2007. p. 131-154. (Advances in Natural and Technological Hazards Research). https://doi.org/10.1007/978-1-4020-4200-3_8