Accounting for Business Adaptations in Economic Disruption Models

Abstract

Current economic models specifically designed for infrastructure outage and disaster situations are attempting to incorporate the ability of businesses to prepare for, adapt to, and recover from, disruptions. Using business impact and recovery data from the 2010–2011 Canterbury earthquakes, and qualitative validation, this paper presents an empirically derived, transferable model for estimating business recovery following infrastructure and noninfrastructure disruptions. The business behaviors model (BBM) is a logarithmic function that calculates operability (ability to meet demand) over time based on 15 industry sectors and the level of experienced infrastructure and noninfrastructure disruption. The BBM can be applied as a temporal adjustment factor to an economic model, or it can be used as a tool to explore the impact of different disruption types and magnitudes on organization recovery.