Modelling disaster vulnerability due to sector interdependencies

• Main Author: Yu, Krista Danielle S.
• Format: text
• Published: Animo Repository 2014
• Online Access: https://animorepository.dlsu.edu.ph/etd_doctoral/1344
• Institution: De La Salle University

Input-output (I-O) based techniques have proven to be effective in modeling how disasters lead to economic disruptions, while taking into account the structural connectivity of economic systems. This dissertation develops a novel vulnerability index that builds upon the foundations of the Leontief I-O model and the inoperability input-output model (IIM), which is capable of identifying and prioritizing the key sectors in the aftermath of disasters. The key sector prioritization framework proposed in this work can contribute in the domain of disaster preparedness and disaster response planning, such as enhancing the efficiency of resource allocation across various sectors. The proposed vulnerability index is formulated in terms of three underlying components: (1) economic impact, (2) diversity of reach, and (3) sector size. The I-O model is then extended to accommodate socio-economic factors through constructing an updated social accounting matrix (SAM) for the Philippines. This is then operationalized through a computable general equilibrium (CGE) framework that overcomes the limitations of I-O models, such as the linearity assumption, lack of substitution, and the absence of prices and market effects. Simulations of an extreme event scenario illustrate how the model estimates welfare implications to various economic agents in the Philippines. The results of the study are useful for policymaking and disaster preparedness as the world economy moves towards increasingly globalized value chains.