The Cost of Historic Earthquakes Today - Economic Analysis since 1900 through the use of CATDAT

The newly-formed CATDAT damaging earthquakes database contains economic damage and historical impact data on over 6500 earthquakes worldwide since 1900. This paper details the economic trends in earthquakes since 1900, with many economic loss values not reported in existing databases. Historical GDP, exchange rate, wage information, population and insurance information have been collected globally to form these comparisons. It was found that the 1988 Spitak earthquake in Armenia caused the greatest impact on a country’s economy as a proportion of nominal GDP (well over 300%), whereas the highest absolute economic loss was seen from Japan’s 1923 Great Kanto Earthquake with approx. $204 billion USD damage (2010 HNDECI adjusted). A separate analysis for earthquake shaking versus secondary effects (tsunami, liquefaction, landslide, fire etc.) as a proportion of historical economic losses is also shown. Detailed economic analysis done as part of this study shows that the adjustment utilised by historic databases using simple inflation via Consumer Price Index greatly underestimates the impact of historic earthquakes, giving less significance to historic events. Thus, a hybrid index is shown to better account for the historical cost of earthquakes in today’s terms, using a combination of wages, construction costs, workers’ production, GDP, CPI and other tools. The results of the global analysis using this index show that there is not a significant increasing trend in global annualized economic losses due to earthquakes, indicating that the second half of the century has not experienced a major urban centre affecting earthquake like the 1923 Great Kanto earthquake. This increase is not as marked as in other studies (MunichRe 2000, 2002; Vranes et al. 2009; Swiss Re 2009), when different economic conversion indices are used.