ABSTRACT
ABSTRACT: Indirect flood losses can cause substantial economic and social disruptions that may last over long periods of time. Due to differentiations in land use and different flood conditions, simple ratios between direct and indirect flood losses are inadequate to reach accurate estimates. Current models for estimating indirect hazard impact are based on economic flow where economies are treated as a series of interconnected activities. The purpose of this article is to give an overview of the state-of-the-art in indirect hazard loss estimation models. These include unit-loss models, Input-Output models, econometric models and increasingly popular Computable General Equilibrium models. Most of these models have been primarily used to estimate effects in policy changes. Yet, since they are strongly founded micro-economics, derivates of these models have been successfully applied in estimating indirect hazard impact, including indirect flood losses. The focus in these models is on the estimation of higher-order effects, by relating local disruption to economic ripple effects on a higher level. While experience in application of these models in actual events is still limited, the first results are promising. Improved accuracy can be reached by adapting the models further to incorporate specific local geographic conditions as well as adjusting models to smaller timeframes.
