Natural Disaster Scenario

Hi Jonathatn, This is similar to a tourism impact. There is no "tourism" industry, since travel/tourism is really a combination of many activities: air travel, car rental, lodging, and dining out/entertainment, etc. So the analyst must create a series of "Events", one for each of the major expenditure categories (the values would be entered as negatives in your case). If you have a single dollar figure but not a breakdown amongst the various spending categories, you should be able to find other tourism studies on-line from which you can borrow - you could adjust them to reflect more business-type activities than family tourism (e.g., decrease the coefficient on gifts/souvenirs, increase the coefficient on hotel). We typically recommend splitting airfare 50/50 between the origin and destination. The Air Transportation sector makes payments to the "Travel arrangement and reservation services" sector, so travel agent expenditures can be included in the airfare expenditure. Air Transportation also makes a payment to the corporate headquarters sector as part of its production function (approximately 0.4% on the dollar).

Thanks, Jenny. This is different than a tourism impact because the $ figure I have is the total economic loss (probably mostly to structures and agriculture), not just the loss in tourism activity. About half of it is insured loss. I'm trying to determine what the downstream effect of these losses is to the various tourism activities. I'm thinking that this would mean a loss of economic activity (to insurance companies, for example) but also a gain in economic activity in other sectors (e.g., construction). Any ideas about a defensible approach? Thanks, again.

To state the obvious, an I-O impact analysis requires converting the disaster to change in demand for industry production for each industry sector. So, for an example, how did hurricane Irene in the Outer Banks of NC affect tourism in the Outer Banks? The actual dollar amount of damage matters far less than what was damaged and the impression left on potential beach house renters. At one extreme you could wipe out the commercial fishing fleet and actually increase tourism to take advantage of better sports fishing. If the state of NC decides not to repair roads or bridges that would have a definite limiting effect. How many beach houses were washed away? -- that would directly tie to tourism losses. The Outer Banks has a special (higher) tax for cottage rentals, so there should be excellent records to show how renters react to hurricanes in the past. Each disaster has to be taken separately to come ups with demand responses. I would check FEMA sources to see if there are "canned responses" to specific types of disasters.