ABSTRACT
Natural disasters, especially earthquakes, can be devastating to human activities, to social organizations at every level and to economic life. After the first shock, the damage is counted by deaths and injuries. In a while, the destroying effects of disaster appear on the economic structure of the region. Economic losses by severe earthquakes can cause long-term reductions in the growth of a nation’s economy and trigger inflation. Therefore, evaluation of economic losses can be considered according to their share in country’s economy using either gross domestic product (GDP) or gross national product (GNP) (Chen et al. 1997; Chan et al. 1998; Chen et al. 2002). Coburn and Spence (1992) displayed that while the absolute value of economic losses seem lower or higher in certain events, their share in country’s GNP is more significant to understand actual losses in economy. For instance, after the Kocaeli and Duzce earthquakes (1999), which occurred in the most industrialized region of Turkey, total economic loss was estimated around 10 billion USD which represented approximately 4% of GDP in 1999.1 Moreover, the biggest business
economic system defining “stocks” and “flows”. This determination helps to better assess probable losses on one hand and on the other hand it prevents any duplication in economic loss modeling.
