VEC model of water infrastructure in Los Angeles: implications for community resilience and recovery

Daniel J. Pastor and Bradley T. Ewing
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Daniel J. Pastor: The University of Texas at El Paso
Bradley T. Ewing: Texas Tech University

Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, 2022, vol. 114, issue 1, No 26, 629-643

Abstract: Abstract Los Angeles is a community that is susceptible to earthquakes, wildfires and other disasters that may cause water utility disruption. This study estimates water production in Los Angeles using a vector autoregressive error correction model (VECM). The model captures the short- and long-run dynamics among water production and elements of the economic system related to the labor market, built environment, energy and transportation networks in the Los Angeles area. We find evidence of a single cointegrating relationship between water production as measured by total monthly potable in gallons, employment, the S&P/Case-Shiller CA-Los Angeles Home Price index, and retail unleaded gasoline prices. VECM results suggest that after a shock that disrupts the equilibrium, such as an earthquake, system moves about 24% toward eliminating the disequilibrium in the first month, with a return to equilibrium in about 4–5 months. The results have implications both domestically and internationally for understanding a community’s resilience and recovery to shocks and, thus, may shed light on how natural disasters affect a local economy.

Keywords: Vector error correction; Resiliency; Natural disaster; Los Angeles (search for similar items in EconPapers)
JEL-codes: C22 Q54 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11069-022-05404-w

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