Open AccessA Case Study on Estimation of Business Interruption Losses to Industrial Sectors Due to Flood Disasters
Author(s) -
Lijiao Yang,
Hirokazu Tatano,
Yoshio Kajitani,
Xuewen Jiang
Publication year - 2015
Publication title -
journal of disaster research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.332
H-Index - 18
eISSN - 1883-8030
pISSN - 1881-2473
DOI - 10.20965/jdr.2015.p0981
Subject(s) - estimation , flood myth , hazard , natural hazard , business , environmental science , distribution (mathematics) , data loss , computer science , econometrics , environmental economics , environmental resource management , meteorology , economics , geography , mathematics , archaeology , mathematical analysis , computer network , chemistry , management , organic chemistry
The case study we present on estimating business interruption (BI) loss to industrial sectors due to floods in Aichi Prefecture, Japan, involves four steps – estimating the business interruption loss rate (BILR), estimating the spatial distribution of hazard information, identifying the spatial distribution of exposure such as firms and employees, and calculating BI loss based on the BILR, hazards, and exposure information as input. Validation was conducted by comparing estimated BI loss to economic loss calculated by an index of industrial production (IIP). We found that the proposed methodology quickly and feasibly estimates BI loss once water depth is obtained. Estimated BILR and BI loss in the industrial sector provides information enabling individual firms to formulate business continuity plans and design risk management strategies.