This paper covers a number of pitfalls that could hinder the development of a common methodology for estimating flood damage. Such pitfalls include double counting, ignoring post‐disaster liabilities, ignoring non‐market losses (e.g. recreation, loss of leisure, damage to historic sites and cultural assets, etc.), ignoring the needs of the end user, and questions as to how indirect/systemic losses might be modeled. With one exception, much of what is discussed in the paper is based on off‐the‐shelf economics and will not prove to be contentious. Regional economists are likely to have different opinions as to how to best model indirect and systemic loss; it is this that will lead to a lively debate as to how to proceed. Assessments of economic fallout from the World Trade Center attack are used to illustrate some of the problems reported in this paper.
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