2018 Volume 13 Issue 3 Pages 571-573
Mr. Yokomatsu provided valuable comments on the paper JDR Vol.11 No.6, pp. 1190-1201 by Takeuchi and Tanaka. The discusser claims that if “direct loss” is defined as a “loss of assets (capital stock)” and “indirect loss” as a “loss of postdisaster production decline,” then the sum of the two as the “total loss” of a disaster contains a double count of disaster loss, because the “value of assets (capital stock)” for “direct loss” is the present value of an output to be produced in the future by the assets, which is nothing but “indirect loss.” This is a misunderstanding caused by an ambiguous definition of the term “loss of assets.” In order to avoid such misunderstanding, the authors clarify the definition by elaborating the content of “total loss” = “direct loss” + “indirect loss” as the “total loss of assets” = “loss of the physical acquisition cost of assets” + “loss of the potential production profit of assets.”
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