Estimation of the Economic Damages Caused by the Hanshin- Awaji Great Earthquake

Abstract

This study proposes a model to estimate the damages by the Hanshi-Awaji great earthquake. The model combines I-O framework with econometric model and estimates indirect damages by the loss of buildings and destruction of transport facilities. Japan has subdivided into four areas considering the magnitude of damages. The damages are evaluated in terms of income loss, unemployment, and changes of inter-regional trade. The results showed that direct and indirect economic damages reached about 13 trillion yen in Japan as a whole and those of some 15% in Hyougo. Validity of the results was confirmed by the accounts statistics.