A Demand-Side Inoperability Input–Output Model for Strategic Risk Management: Insight from the COVID-19 Outbreak in Shanghai, China

Jian Jin () and Haoran Zhou
Additional contact information
Jian Jin: School of Economics, Hebei University, Baoding 071002, China
Haoran Zhou: School of Economics, Hebei University, Baoding 071002, China

Sustainability, 2023, vol. 15, issue 5, 1-22

Abstract: This paper proposes the dynamic inoperability input–output model (DIIM) to analyze the economic impact of COVID-19 in Shanghai in the first quarter of 2022. Based on the input–output model, the DIIM model introduces the sector elasticity coefficient, assesses the economic loss of the system and the influence of disturbances on other sectors through sectoral dependence, and simulates the inoperability and economic loss changes through time series. A multi-evaluation examination of the results reveals that the degree of inoperability of sub-sectors is inconsistent with the ranking of economic losses and that it is hard to quantify the impact of each sector directly. Different from the traditional DIIM model that only considers the negative part of the disaster, the innovation of this paper is that the negative value of the inoperability degree is used to measure the indirect positive growth of sectors under the impact of the Shanghai pandemic shock. At the same time, policymakers need to consider multi-objective optimization when making risk management decisions. This study uses surrogate worth trade-off to construct a multi-objective risk management framework to expand the DIIM model to enable policymakers to quantify the trade-off between economic benefit and investment costs when making risk management decisions.

Keywords: COVID-19; risk management; surrogate worth trade-off; DIIM model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/5/4003/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/5/4003/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:5:p:4003-:d:1077038

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().