A high resolution input–output model to assess the economic impact of floods

Jlenia Di Noia, Alessandro Caiani, Luigi Cesarini, Marcello Arosio and Beatrice Monteleone

Journal of Economic Behavior & Organization, 2025, vol. 230, issue C

Abstract: The frequency and intensity of extreme weather events are rising due to global warming. Beyond damaging physical assets, these events can cause substantial economic losses through business interruptions and cascading shocks across production networks. The paper introduces a computational inter-regional input–output framework to assess the economic impacts of river floods in Italy. The model leverages a georeferenced database of productive plants built from the ASIA-local units database. By aligning plant coordinates with inundation maps, it enhances the identification of affected units, their associated water depth, and the shock caused to sectors’ productive capacity. To demonstrate the utility of this approach, we apply it to the major flood event that struck Emilia-Romagna in May 2023, quantifying both direct and indirect economic losses from business interruptions across sectoral, regional, and national levels.

Keywords: Input–output models; Natural disasters; Climate change; Floods; Economic impact assessment; Indirect effects (search for similar items in EconPapers)
JEL-codes: C63 C67 D57 Q54 R15 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:230:y:2025:i:c:s0167268125000162

DOI: 10.1016/j.jebo.2025.106896

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