Estimating Damage Costs from Natural Disasters in Korea

AbstractThis study forecasts the future cost of direct economic damages caused by natural disasters in Korea by using panel data regression. The authors first develop a balanced panel data spanning 2001–2012 for all 16 metropolitan cities and provinces in Korea. The result shows that a 1% increase i...

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Bibliographic Details
Published in:Natural hazards review 2017-11, Vol.18 (4)
Main Authors: Lee, Miyeon, Hong, Jong Ho, Kim, Kwang Yul
Format: Article
Language:English
Subjects:
Annual precipitation
Costs
Damage
Data
Disaster management
Disasters
Emergency preparedness
Environmental management
Fires
Forestry
Fossil fuels
Local government
Longitudinal studies
Meteorological data
Natural disasters
Precipitation
Technical Papers
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Summary:AbstractThis study forecasts the future cost of direct economic damages caused by natural disasters in Korea by using panel data regression. The authors first develop a balanced panel data spanning 2001–2012 for all 16 metropolitan cities and provinces in Korea. The result shows that a 1% increase in annual precipitation and impervious surfaces increases damage costs by 4.52 and 1.74%, respectively. In addition, the financial independence of local governments is negatively correlated with damage costs. The maximum annual damage costs from natural disasters through 2060 are estimated to be US$20.9 billion, which would be 1.03% of future Korean gross domestic product (GDP). Among the regions, Gangwon-do, Jeollabuk-do, and Jeollanam-do, which have a high percentage of impervious surfaces and a low financial independence rate, are expected to be the most vulnerable to natural disasters. Their estimated maximum annual damage costs are above US$5 billion by 2060, which would exceed 7% of their gross regional domestic product (GRDP). This study is the first attempt to estimate and forecast the damage costs from natural disasters using region-specific weather data in Korea. It suggests a need for a well-designed natural disaster management plan at both the central and local government levels.
ISSN:1527-6988
1527-6996
DOI:10.1061/(ASCE)NH.1527-6996.0000259