Predicting Business Financial Losses in the 1989 Loma Prieta and 1994 Northridge Earthquakes: Implications for Loss Estimation Research

Spurred in part by the rising economic costs of natural disasters, there has recently been a dramatic increase in the number of studies aimed at estimating financial losses caused by large-scale earthquakes. For example, in 1997 the journal Earthquake Spectra devoted an entire issue to this topic. Papers appearing in the special issue ranged from cost-benefit analyses of structural rehabilitation strategies (D'Ayala et al., 1997) to the development of real-time damage assessment tools Pguchi et al. 1997). In 1998 the Multidisciplinary Center for Earthquake Engineering Research published a monograph addressing the engineering and socioeconomic impacts of earthquakes (Shinozuka, Rose, and Eguchi, 1998). A primary focus of the report was on the regional economic impacts of earthquake-induced electricity lifeline disruptions. More recently, in 1999 the National Research Council Committee on Assessing the Costs of Natural Disasters published a report outlining a framework for loss estimation (National Research Council, 1999). The Committee's primary goals were to develop a framework for consistent and systematic collection of loss data from natural disasters and to build an institutional capacity for collecting such data.