Economics of Natural Disasters: A Critical Review

Significant progress has been made in recent years for modeling spatial economic impacts of disasters in a regional context (for example, Okuyama and Chang eds. Modeling the Spatial Economic Impacts of Disasters, forthcoming). While these advancements are more toward modeling strategies based on conventional frameworks, little has been dealt with the theory on economics of disasters, since the pioneering work by Dacy and Kunreuther (The Economics of Natural Disasters, 1969). In this paper, “The Economics of Natural Disasters” is reviewed and updated for providing a theoretical perspective toward disaster related research. The review is carried our through restructuring the framework of Dacy and Kunreuther with new findings from the recent studies and extending it to a regional context. In addition, the paper proposes the research directions for constructing further the theory on economics of disaster. THE ECONOMICS OF NATURAL DISASTERS: A CRITICAL REVIEW Yasuhide Okuyama Regional Research Institute, West Virginia University, Morgantown, WV 26506-6825, [email protected] Abstract: Significant progress has been made in recent years for modeling spatial economic impacts of disasters in a regional context (for example, Okuyama and Chang eds. Modeling the Spatial Economic Impacts of Disasters, forthcoming). While these advancements are more toward modeling strategies based on conventional frameworks, little has been dealt with the theory on economics of disasters, since the pioneering work by Dacy and Kunreuther (The Economics of Natural Disasters, 1969). In this paper, “The Economics of Natural Disasters” is reviewed and updated for providing a theoretical perspective toward disaster related research. The review is carried our through restructuring the framework of Dacy and Kunreuther with new findings from the recent studies and extending it to a regional context. In addition, the paper proposes the research directions for constructing further the theory on economics of disaster. Significant progress has been made in recent years for modeling spatial economic impacts of disasters in a regional context (for example, Okuyama and Chang eds. Modeling the Spatial Economic Impacts of Disasters, forthcoming). While these advancements are more toward modeling strategies based on conventional frameworks, little has been dealt with the theory on economics of disasters, since the pioneering work by Dacy and Kunreuther (The Economics of Natural Disasters, 1969). In this paper, “The Economics of Natural Disasters” is reviewed and updated for providing a theoretical perspective toward disaster related research. The review is carried our through restructuring the framework of Dacy and Kunreuther with new findings from the recent studies and extending it to a regional context. In addition, the paper proposes the research directions for constructing further the theory on economics of disaster.