Analyzing indirect economic impacts of wildfire damages on regional economies

This article estimates the economic impacts of wildfire damage on Korea's regional economies, developing an integrated disaster-economic system for Korea. The system is composed of four modules: an interregional computable general equilibrium (ICGE) model for the eastern mountain area (EMA) and the rest of Korea, a Bayesian wildfire model, a transportation demand model, and a tourist expenditure model. The model has a hierarchical structure, with the ICGE model serving as a core module to link to three other modules. In the impact analysis of a wildfire, three external shocks are injected into the ICGE model: (1) the wildfire damaged area derived from the Bayesian wildfire model, (2) changes in travel times among cities and counties derived from the transportation demand model, and (3) variations in visitors ’ expenditures derived from the tourist expenditure model. The simulation shows that the gross regional product (GRP) of the EMA would decrease by 0.25% to 0.55% without climate change and by 0.51%–1.23% with climate change. This article contributes to the development of quantitative linkages be tween macro and micro spatial models in a bottom-up system for the impact analysis of disasters, integrating a regional economic model with a place-based disaster model and the demands of tourism and transportation.

Source: Risk Analysis - February 23, 2023 Category: International Medicine & Public Health Authors: Euijune Kim, Younghyun John Kwon Tags: ORIGINAL ARTICLE Source Type: research