Billion-Dollar Natural Disasters: What Does the Future Look Like?

Supplemental Files
Date
2020-01-01
Authors
Shukla, Charchit
MacKenzie, Cameron
Journal Title
Journal ISSN
Volume Title
Publisher
Altmetrics
Authors
Research Projects
Organizational Units
Journal Issue
Series
Abstract

The average cost of natural disasters and damage to the U.S. economy has increased each year from approximately $35 billion in 1980 to $300 billion in 2017. This increase in the cost of natural disasters could be due to an increase in the strength and frequency of natural disasters and/or growth in the U.S. economy. We forecast the cost of natural disasters by fitting probability distributions to the historical cost of billion-dollar disasters. We model the cost of natural disasters based on all weather-related natural disasters that cost more than $1 billion since 1980 and based only on those natural disasters that cost more than $1 billion that occurred in the past 20 years. Using the data from 1980 to 2018, the model forecasts the annual expected cost to be $52 billion. However, if only the recent disaster data is used to the fit the model, we forecast the expected annual cost to be $93 billion.

Description

The proceeding is published as Shukla, Charchit, and Cameron A. MacKenzie. "Billion-Dollar Natural Disasters: What Does the Future Look Like?" In: L. Cromarty, R. Shirwaiker, P. Wang, eds., IISE Annual Conference and Expo 2020. Proceedings of a meeting held May 3-June 2, 2020. Posted with permission.

Keywords
Natural disasters, economic impacts, probabilistic forecast, Monte Carlo simulation
Citation
DOI
Source