A disaster such as Katrina has billions of dollars in indirect but very real impacts that aren't captured in tallies of insured losses, notes Frederick Krimgold, director of the disaster risk reduction program at Virginia Polytechnic Institute in Blacksburg.
In Katrina's case these include disruptions of businesses, from restaurants to fishing and shipping.They include the ordeal of residents who may go without phone service for days or electricity for weeks.Workers lose income, and state and local governments lose tax revenues, in part because some properties such as boats or homes no longer exist.
"You have a cascading pattern of economic consequences," says Dr. Krimgold
."We tend to underestimate the cost of these events, and we tend to underinvest in their mitigation."He's
not sure if the Katrina experience will change that, but it is surely bringing home the potential magnitude of these indirect impacts.
New Orleans didn't face the full fury of the storm, yet the city is for now virtually uninhabitable.Flooding has affected everything from electricity to potable water supplies.
"They built those levees for an 18-foot storm surge," Krimgold