Economic impact of production bottlenecks caused by disasters impacting interdependent industry sectors

This paper provides a new linear programming model, based on Leontief׳s input-output model, to investigate the economic consequences of production capacity bottlenecks caused by disasters. An important contribution of the paper is the incorporation of industry sectors׳ preferences in allocating limited products/services between final domestic demand, foreign final demand, and intermediate industries. This provides support for estimating some of the indirect economic impacts of disasters. The paper also considers recovery operations within disrupted sectors, from the standpoint of evaluating the performance of the economy during the transition period after a disaster. The models are implemented to investigate the economic consequences of electricity sector disruption in Singapore and, finally, computational results are reported.