(2010) Estimating the Direct Economic Damage of the Earthquake in Haiti
Summary — This paper estimates the direct economic damage of the January 12, 2010 earthquake in Haiti using regression techniques. The base estimate is US$8.1 billion for a death toll of 250,000, but the authors note this could be a lower-bound estimate, with US$13.9 billion within statistical error.
Key Findings
- The estimated damage is US$7.2bn for an earthquake that causes 200,000 deaths.
- If the death toll were to reach 250,000, the estimated damage is US$8.1bn.
- An estimate of US$13.9bn for the same death toll is within statistical error.
- Haiti's needs will total several billion dollars, requiring donor coordination.
Full Description
This paper uses regression techniques to assess the direct economic cost of the January 12, 2010 earthquake in Haiti. The authors combine worldwide data from approximately 2,000 natural catastrophic events between 1970 and 2008 to model the dollar amount of damage as a function of the number of dead or missing, economic development, country size, regional factors, and a linear trend. Damages are estimated for a disaster with 200,000 and 250,000 total dead and missing, using Haiti’s economic and demographic data. The base estimate is US$8.1 billion for a death toll of 250,000, but an estimate of US$13.9 billion is within statistical error. The authors caution that the results should be interpreted with caution due to potential measurement errors and model specification issues.